SSC CGL Mock – Paper III Finance & Economics Mock Test 05 – Part A · Finance & Accounts | Online Quiz

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SSC CGL Mock – Paper III Finance & Economics Mock Test 05 – 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.

Situation-basedA firm expects to lose a pending lawsuit and provides for the likely damages now, but records nothing for a gain it hopes to win in another case. Which consideration of AS 1 is applied?

Correct Answer: B [Prudence]

Explanation:

Prudence: provide for probable losses, but do not anticipate gains.

Statement-basedConsider the statements:
I. Ind AS are converged with IFRS, which are issued by the IASB.
II. The National Financial Reporting Authority (NFRA) was constituted under the Chartered Accountants Act, 1949.
Which of the statements is/are correct?

Correct Answer: A [Only I]

Explanation:

Ind AS are converged with IFRS issued by the IASB; NFRA was constituted on 1 October 2018 under s.

CalculationA consultant's cash book for the year shows receipts: fees ₹ 8,20,000 and a bank loan ₹ 2,00,000; payments: expenses ₹ 4,60,000, a computer ₹ 90,000, loan instalment ₹ 50,000 and loan interest ₹ 18,000. Fees receivable rose by ₹ 25,000, outstanding expenses rose by ₹ 7,000 and depreciation on the computer is ₹ 18,000. The profit on the accrual basis is

Correct Answer: A [₹ 3,42,000]

Explanation:

Loan, computer and loan repayment are capital items.

A firm writes off a ₹ 400 calculator as an expense in the year of purchase instead of depreciating it over its life. This is justified by which concept?

Correct Answer: D [Materiality]

Explanation:

An item too small to affect decisions need not be treated separately.

CalculationReena starts business with cash ₹ 4,00,000 and a building worth ₹ 6,00,000. She takes a bank loan of ₹ 2,50,000, buys goods on credit for ₹ 1,80,000, sells goods costing ₹ 1,20,000 on credit for ₹ 1,65,000, takes home goods costing ₹ 8,000, pays salary ₹ 22,000 and collects ₹ 1,00,000 from debtors. Her total assets are now

Correct Answer: C [₹ 14,45,000]

Explanation:

Cash ₹ 7,28,000 + building ₹ 6,00,000 + stock ₹ 52,000 + debtors ₹ 65,000 = ₹ 14,45,000 = loan ₹ 2,50,000 + creditors ₹ 1,80,000 + capital ₹ 10,15,000.

CalculationArul's journal for April records: started business with cash ₹ 2,50,000 and machinery ₹ 1,50,000; bought goods from Ram at a list price of ₹ 60,000 less 10% trade discount; sold goods to Sita for ₹ 45,000; Sita paid ₹ 44,100 in full settlement; Ram was paid ₹ 53,000 in full settlement; rent paid ₹ 9,000; goods costing ₹ 2,500 given as free samples. Each transaction is journalised as one entry. The total of the debit column of the journal is

Correct Answer: D [₹ 6,09,500]

Explanation:

400,000 + 54,000 + 45,000 + 45,000 (compound) + 54,000 (compound) + 9,000 + 2,500 = ₹ 6,09,500; trade discount is never journalised.

CalculationA trader's drawings were ₹ 10,000 on 1 June, ₹ 15,000 on 1 September, ₹ 8,000 on 1 December and ₹ 12,000 on 1 March. Interest on drawings is 10% p.a.; the year ends on 31 March. The interest is

Correct Answer: B [₹ 2,075]

Explanation:

Product method: 10,000 × 10 + 15,000 × 7 + 8,000 × 4 + 12,000 × 1 = 249,000 month-rupees; × 10%/12 = ₹ 2,075.

In a triple column cash book the discount column on the debit side totals ₹ 1,840 and that on the credit side ₹ 1,260. The correct posting is

Correct Answer: A [Discount Allowed A/c debited ₹ 1,840; Discount Received A/c credited ₹ 1,260]

Explanation:

Discount columns are memorandum columns; their totals are posted separately – allowed (debit side) to the debit of Discount Allowed, received to the credit of Discount Received.

CalculationCustomer Divya's account: opening debit balance ₹ 22,000; credit sales to her ₹ 36,000; goods returned by her ₹ 2,400; her cheque for ₹ 30,000 received and banked, later dishonoured; then ₹ 12,000 received in cash and ₹ 600 discount allowed. Her closing balance is

Correct Answer: C [₹ 43,000]

Explanation:

Debits 22,000 + 36,000 + 30,000 (dishonour) = 88,000; credits 2,400 + 30,000 + 12,600 = 45,000; balance ₹ 43,000 debit.

10.

CalculationA petty cash imprest of ₹ 8,000 is in use. During the week ₹ 5,270 is spent, and the firm decides to raise the imprest to ₹ 10,000 from the next week. How much should the main cashier now hand over?

Correct Answer: D [₹ 7,270]

Explanation:

Cash left = ₹ 8,000 − ₹ 5,270 = ₹ 2,730; new imprest − cash left = ₹ 10,000 − ₹ 2,730 = ₹ 7,270 (B12 ch 4, Imprest Top-up).

11.

CalculationCash book of Neela Exports (bank column) shows a debit balance of ₹ 14,200. Cheques deposited ₹ 26,500 have not been credited; cheques issued ₹ 7,800 have not been presented; the bank has debited charges and interest ₹ 1,350 and credited a dividend of ₹ 2,400 collected for the firm; a deposit of ₹ 4,600 was entered in the cash book as ₹ 6,400. The balance as per the pass book is

Correct Answer: A [Overdraft ₹ 5,250]

Explanation:

14,200 − 26,500 + 7,800 − 1,350 + 2,400 − 1,800 (cash book overstated) = -5,250 → overdraft ₹ 5,250.

12.

CalculationThe cash book shows an overdraft of ₹ 40,000 and the pass book an overdraft of ₹ 33,700. Cheques issued ₹ 9,000 were not presented and interest on overdraft ₹ 1,100 is recorded only by the bank. The only other item is cheques deposited but not yet credited. Their amount is

Correct Answer: B [₹ 1,600]

Explanation:

−40,000 + 9,000 − x − 1,100 = −33,700 → x = ₹ 1,600.

13.

CalculationCash book (bank column) on 31 March: ₹ 30,000 debit. (i) A customer's cheque of ₹ 5,000 received on 30 March was entered in the cash column and not yet banked. (ii) A post-dated cheque of ₹ 4,000, dated 5 April, was issued on 28 March and entered in the bank column. (iii) A cheque of ₹ 7,000 issued on 20 March was paid by the bank on 27 March. (iv) Bank charges ₹ 300 are not in the cash book. The pass book balance is

Correct Answer: C [₹ 33,700]

Explanation:

Only (ii) and (iv) reconcile: ₹ 30,000 + ₹ 4,000 − ₹ 300 = ₹ 33,700; (i) never reached the bank and (iii) is in both records.

14.

CalculationCash book (bank column): ₹ 45,500 debit. A receipt of ₹ 3,900 was entered as ₹ 9,300; a customer paid ₹ 7,200 directly into the bank; bank charges ₹ 380 are not recorded; the bank wrongly debited ₹ 2,000 of another account holder. Timing differences also exist. The balance of the amended cash book is

Correct Answer: A [₹ 46,920]

Explanation:

₹ 45,500 − ₹ 5,400 (own error) + ₹ 7,200 − ₹ 380 = ₹ 46,920; the bank's error and timing items stay only in the BRS.

15.

CalculationThe trial balance of Sakthi Agencies disagreed and the difference was put in Suspense; the draft net profit was ₹ 2,36,500. Errors: (i) Sales Book overcast by ₹ 4,000; (ii) repairs to the building ₹ 18,000 debited to Building Account; (iii) a credit purchase of ₹ 11,000 from Joseph correctly entered in the Purchases Book but posted to the debit of Joseph's account; (iv) a cheque of ₹ 2,600 received from Kala credited to Kamal; (v) interest received ₹ 1,750 not posted to Interest Account. The corrected net profit is

Correct Answer: D [₹ 2,16,250]

Explanation:

Only nominal items change profit: −4,000 (Sales) − 18,000 (Repairs) + 1,750 (Interest) = -20,250; ₹ 2,36,500 → ₹ 2,16,250.

16.

Statement-basedConsider the statements:
I. If the errors are not located before the final accounts are prepared, the balance of the Suspense Account is shown in the Balance Sheet.
II. Agreement of the trial balance proves that no error of principle has been made.
Which of the statements is/are correct?

Correct Answer: A [Only I]

Explanation:

An unclosed suspense balance goes to the Balance Sheet; TB agreement proves only arithmetical accuracy – errors of principle stay hidden.

17.

A credit purchase of ₹ 14,500 from Ravi was omitted from the books altogether, but the goods were included in the closing stock. Before rectification, the effect on the final accounts is

Correct Answer: B [profit overstated by ₹ 14,500 and creditors understated by ₹ 14,500]

Explanation:

Purchases are short (cost too low) while the stock is counted, so profit is too high; Ravi's balance is missing from creditors; a complete omission does not disturb the TB (B12 ch 6).

18.

Errors or omissions of earlier periods that come to light in the current period (prior period items) are dealt with by which Accounting Standard?

Correct Answer: C [AS 5]

Explanation:

AS 5 – Net Profit or Loss for the Period, Prior Period Items and Changes in Accounting Policies.

19.

CalculationA machine bought on 1 April 2023 for ₹ 2,50,000 is depreciated at 20% p.a. on the written down value through a Provision for Depreciation Account; the year ends on 31 March. It is sold on 30 September 2025 for ₹ 1,50,000. The balance transferred from the Asset Disposal Account to the Profit and Loss Account is

Correct Answer: A [Profit ₹ 6,000]

Explanation:

Book value 31-3-2025 = ₹ 1,60,000; 6 months' depreciation ₹ 16,000 → ₹ 1,44,000; ₹ 1,50,000 − ₹ 1,44,000 = Profit ₹ 6,000.

20.

CalculationLoose tools are depreciated by the revaluation method. Opening value ₹ 24,000, tools bought during the year ₹ 9,500, closing valuation ₹ 26,800. Depreciation for the year is

Correct Answer: C [₹ 6,700]

Explanation:

₹ 24,000 + ₹ 9,500 − ₹ 26,800 = ₹ 6,700.

21.

CalculationMachine A was bought on 1 April 2023 for ₹ 2,00,000 and Machine B on 1 January 2024 for ₹ 80,000. Depreciation is 10% p.a. on the written down value (year ending 31 March), charged to the asset account for the months used. Machine A was sold on 30 September 2025. The balance of the Machinery Account on 31 March 2026 is

Correct Answer: B [₹ 63,180]

Explanation:

Only B remains: 80,000 − 2,000 (3 months) = 78,000 → 70,200 → ₹ 63,180.

22.

Statement-basedConsider the statements under AS 10:
I. A gain on the derecognition (sale) of an item of property, plant and equipment is classified as revenue.
II. Residual value, useful life and depreciation method are reviewed at least at each financial year-end.
Which of the statements is/are correct?

Correct Answer: B [Only II]

Explanation:

Gains on derecognition are not classified as revenue; the three estimates are reviewed at least at each year-end.

23.

Count the statementsHow many of the following are capital expenditure?
(a) Brokerage paid on buying land
(b) Replacing the worn-out tyres of a delivery van
(c) Adding a new floor to the office building
(d) Fuel for the trial run of a new plant
(e) Overhaul of a second-hand machine before its first use
(f) Insurance of stock-in-trade
(g) Repairs to an old building

Correct Answer: D [4]

Explanation:

Capital: brokerage on land, new floor, trial run, overhaul before first use = 4; tyres, stock insurance and repairs only maintain – revenue.

24.

CalculationOpening stock 400 units @ ₹ 25; purchases 600 units @ ₹ 30 and 500 units @ ₹ 34. 1,100 units were sold @ ₹ 45. By how much does the gross profit under FIFO exceed that under the periodic weighted average method?

Correct Answer: A [₹ 1,600]

Explanation:

Closing 400 units: FIFO ₹ 13,600, average 400 × ₹ 30 = ₹ 12,000; gross profit differs by the closing stock difference ₹ 1,600.

25.

CalculationA retailer's closing stock at selling price is ₹ 2,88,000. Goods are marked up 20% on cost. Using the retail method, the stock is valued at

Correct Answer: C [₹ 2,40,000]

Explanation:

Cost = ₹ 2,88,000 × 100/120 = ₹ 2,40,000; the retail method is allowed if it approximates cost.

26.

CalculationA fire destroyed the godown of Sundaram & Co. Up to the fire: opening stock ₹ 90,000; purchases ₹ 4,20,000; sales as per books ₹ 5,40,000, which include goods of ₹ 30,000 sent on approval (invoiced at cost plus 25%) and not yet approved; goods costing ₹ 8,000 taken by the owner were not recorded. Gross profit is 20% of sales. Goods worth ₹ 11,000 were saved. The loss of stock by fire is

Correct Answer: B [₹ 59,000]

Explanation:

True sales ₹ 5,10,000; cost of sales ₹ 4,08,000; stock ₹ 94,000 less goods with customers on approval ₹ 24,000 = ₹ 70,000 in the godown; less salvage = ₹ 59,000.

27.

Statement-basedConsider the statements under AS 2:
I. The standard cost and retail methods may be used for convenience if the results approximate cost.
II. Inventories are normally written down to net realisable value on the total of all items, not item by item.
Which of the statements is/are correct?

Correct Answer: A [Only I]

Explanation:

Paras 18–19 allow standard cost and retail methods if they approximate cost; para 21 makes the write-down item by item.

28.

CalculationTrial balance of Thendral Stores on 31 March (₹): capital 4,00,000; drawings 36,000; sales 7,80,000; purchases 5,10,000; opening stock 85,000; wages 34,000; salaries 60,000; rent 30,000; insurance 9,600; bad debts 3,000; provision for doubtful debts 4,000; debtors 1,20,000; creditors 95,000; machinery 2,40,000; furniture 60,000; bank 91,400. Adjustments: closing stock 1,10,000; salaries outstanding 5,000; insurance prepaid 2,400; depreciation 10% on machinery and 5% on furniture; provision for doubtful debts 5% on debtors; goods costing 4,000 taken by the owner, not recorded. The total of the Balance Sheet (with the provision deducted from debtors) is

Correct Answer: D [₹ 5,90,800]

Explanation:

Net profit ₹ 1,30,800; capital ₹ 4,00,000 + ₹ 1,30,800 − drawings ₹ 40,000 = ₹ 4,90,800; + creditors ₹ 95,000 + outstanding salaries ₹ 5,000 = ₹ 5,90,800 = total assets.

29.

CalculationA manufacturer's figures: opening raw materials ₹ 40,000; purchases ₹ 3,00,000; closing raw materials ₹ 50,000; direct wages ₹ 1,20,000; factory overheads ₹ 90,000 (no work-in-progress); opening finished goods ₹ 60,000; closing finished goods ₹ 70,000; net sales ₹ 6,12,500. The gross profit ratio is

Correct Answer: C [20%]

Explanation:

Cost of goods produced ₹ 5,00,000; COGS = ₹ 60,000 + ₹ 5,00,000 − ₹ 70,000 = ₹ 4,90,000; GP ₹ 1,22,500 ÷ ₹ 6,12,500 = 20%.

30.

CalculationReena and Sam share profits 3 : 2 (Reena 3/5). Capitals: Reena ₹ 3,00,000, Sam ₹ 5,00,000; interest on capital 6% p.a.; Sam gets a salary of ₹ 4,000 a month. Net profit before these items is ₹ 3,00,000. Sam's total income from the firm is

Correct Answer: D [₹ 1,59,600]

Explanation:

Divisible profit = ₹ 3,00,000 − interest ₹ 48,000 − salary ₹ 48,000 = ₹ 2,04,000; Sam: interest ₹ 30,000 + salary ₹ 48,000 + 2/5 share ₹ 81,600 = ₹ 1,59,600.

31.

CalculationThe provision for doubtful debts stands at ₹ 9,500 against debtors of ₹ 1,80,000, and the trial balance shows bad debts of ₹ 1,500. After writing off another ₹ 3,000, the provision is to be cut to 2% of the remaining debtors. Overall, the Profit and Loss Account receives

Correct Answer: A [a credit of ₹ 1,460]

Explanation:

₹ 1,500 + ₹ 3,000 + new provision ₹ 3,540 − old ₹ 9,500 = −₹ 1,460: the excess old provision is written back (credited) to P&L (B12 ch 9, Provision One-Liner).

32.

Statement-basedConsider the statements about final accounts:
I. An adjustment given outside the trial balance appears twice in the final accounts.
II. When closing stock is shown inside the trial balance, it is credited to the Trading Account and also shown as an asset.
Which of the statements is/are correct?

Correct Answer: A [Only I]

Explanation:

Outside the TB → two effects; closing stock inside the TB (adjusted purchases) appears only in the Balance Sheet (B12 ch 9).

33.

CalculationReceipts and Payments of a sports club for 2025-26 (₹): subscriptions 1,64,000 (including 6,000 for 2024-25 and 8,000 for 2026-27); general donations 20,000; interest received 4,500; sale of old equipment 7,000 (book value 9,000); salaries paid 72,000 (including 5,000 for 2024-25); rent 24,000; electricity 18,600; sports material 26,400; new equipment 60,000. Adjustments: subscriptions due for 2025-26 9,000; 3,000 for 2025-26 had been received in 2024-25; salaries outstanding 6,000; sports material stock 4,000 (opening) and 5,200 (closing); interest accrued 1,500; depreciation on equipment 15,000. The surplus for the year is

Correct Answer: B [₹ 30,200]

Explanation:

Income: subscriptions ₹ 1,62,000 + donations 20,000 + interest 6,000 = ₹ 1,88,000; expenditure: salaries 73,000 + rent 24,000 + electricity 18,600 + material 25,200 + depreciation 15,000 + loss on sale 2,000 = ₹ 1,57,800; surplus ₹ 30,200.

34.

CalculationA trust's capital fund on 1 April was ₹ 3,10,000. During the year it received a legacy of ₹ 50,000 and life membership fees of ₹ 20,000 (to be capitalised), and its Income and Expenditure Account showed a deficit of ₹ 14,600. The capital fund on 31 March is

Correct Answer: D [₹ 3,65,400]

Explanation:

₹ 3,10,000 + ₹ 50,000 + ₹ 20,000 − ₹ 14,600 = ₹ 3,65,400.

35.

CalculationA club has 450 members paying ₹ 800 a year each. In 2025-26 it received ₹ 3,52,000 as subscriptions, which included ₹ 12,000 for 2024-25 and ₹ 9,600 for 2026-27. In 2024-25 it had received ₹ 6,400 in advance for 2025-26. Subscriptions for 2025-26 still outstanding on 31 March 2026 are

Correct Answer: B [₹ 23,200]

Explanation:

Income ₹ 3,60,000 = received for the year ₹ 3,30,400 + last year's advance ₹ 6,400 + due → due = ₹ 23,200.

36.

Statement-basedConsider the statements about non-profit organisations:
I. An endowment fund is invested permanently and only its income is used for the stated purpose.
II. A recurring government grant for meeting running expenses is a capital receipt.
Which of the statements is/are correct?

Correct Answer: A [Only I]

Explanation:

An endowment fund is not spent – only its income is; a grant for running expenses is revenue, a grant for a specific asset is capital (B12 ch 10).

37.

CalculationMohan's acceptance for ₹ 48,000 is due in 5 months. He retires it 2 months before the due date and is allowed a rebate at 9% p.a. He pays

Correct Answer: C [₹ 47,280]

Explanation:

Rebate = ₹ 48,000 × 9 × 2 ÷ 1,200 = ₹ 720; payment ₹ 47,280 (B12 ch 11).

38.

Statement-basedConsider the statements:
I. The Negotiable Instruments Act, 1881 came into force on 1 March 1882.
II. A promissory note payable on presentment earns three days of grace.
Which of the statements is/are correct?

Correct Answer: A [Only I]

Explanation:

The Act was enacted on 9 Dec 1881 and in force from 1 Mar 1882; days of grace are not allowed on instruments payable on demand, at sight or on presentment.

39.

CalculationDebtors' Ledger Adjustment Account: opening ₹ 1,26,000, closing ₹ 1,38,500; credit sales ₹ 4,20,000; cash sales ₹ 55,000; returns inward ₹ 9,200; discount allowed ₹ 6,300; bills receivable received ₹ 48,000; cheques dishonoured ₹ 5,600; bad debts ₹ 4,100; provision for doubtful debts raised by ₹ 3,000; transfer to the creditors' ledger ₹ 7,500. Cash received from debtors was

Correct Answer: A [₹ 3,38,000]

Explanation:

₹ 1,26,000 + ₹ 4,25,600 − ₹ 75,100 − ₹ 1,38,500 = ₹ 3,38,000; cash sales and the provision are left out.

40.

At the month-end the general ledger and the creditors' ledger each agree, but the trial balance of the debtors' ledger does not. The error lies

Correct Answer: B [in a customer's account or in the debtors' totals]

Explanation:

Each ledger balances by itself, so the error is in the ledger that fails (B12 ch 12).

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