Cost of Goods Sold

Q.

Does investment come into the income and expenditure account?

Q.

Calculate the gross profit /loss if:

Sales Rs. 90, 000; Closing stock Rs. 40, 000; Opening stock Rs. 40, 000; Purchases Rs.40, 000; Wages Rs. 20, 000.

1. Loss of Rs. 10, 000

2. Profit of Rs. 30, 000

3. Profit of Rs. 40, 000

4. Loss of Rs. 20, 000

Q.

Excess of sales over cost of goods sold in an accounting period is termed as:

1. Net Profit

2. Gross Profit

3. Retained Earnings

4. None of the above

Q. Opening Inventory + Purchases + Carriage Inwards - Closing Inventory =

1. Cost of Sales
2. Gross Profit
3. Gross Loss
4. Cost of Inventory

Q.

Given the following data: Purchases Rs. 4, 500, Returns outwards Rs. 300, Returns inwards Rs. 150, Carriage outwards Rs. 830, Carriage inwards Rs. 260, Opening stock Rs. 935, and closing stock Rs. 1, 100. The value of the cost of goods sold is:

1. Rs. 4, 295

2. Rs. 4, 445

3. Rs. 5, 015

4. Rs. 4, 745

Q.

Calculate the gross profit /loss if:

Sales Rs. 60, 000; Cost of sales Rs. 50, 000; Opening stock Rs. 10, 000; Purchases Rs.40, 000; Wages Rs. 20, 000 and Office rent Rs. 10, 000.

1. None of the above

2. Profit of Rs. 10, 000

3. Loss of Rs. 10, 000

4. Profit of Rs. 10, 000

Q.

Which of the following would NOT be considered as a component of 'cost' of stock?

1. Import duties

2. Purchase Price

3. Salaries of selling staff

4. Transportation inward costs

Q.

Assuming no returns outwards or carriage inwards, the cost of goods sold will be equal to:

1. Sales less gross profit

2. Purchases plus closing stock less opening stock

3. Opening stock plus purchases plus closing stock

4. Closing stock less purchases plus opening stock

Q.

Cost of goods available for sale – closing inventory = What?

1. Cost of opening finished goods inventory

2. Cost of goods sold

3. None of the above

4. Opening Inventory

Q.

Gross profit is calculated as:

1. Sales revenue less sales returns plus cost of sales

2. Sales revenue plus sales returns less cost of sales

3. Sales revenue less sales returns less discount allowed less cost of sales

4. Sales revenue less sales returns less cost of sales

Q. Purchases-Rs. 26, 000, Carriage Inwards- Rs. 890, Opening Stock- Rs. 4, 500, and Closing Stock- Rs. 6, 130. From the given information, cost of sales = .

1. Rs. 25, 260
2. Rs. 27, 040
3. Rs. 26, 150
4. Rs. 47, 450

Q.

Which of the following expenses would you regard as part of the cost of goods sold?

1. Packing the goods for delivery to customers

2. Insurance of goods in the warehouse against fire and theft

3. Advertising the goods for sale

4. Insurance and freight on importing goods for sale

Q.

Which of the following is incorrect? The cost of sales is:

1. sales – return inwards – Closing inventory – gross profit

2. opening inventory + purchases + carriage inwards – closing inventory

3. opening inventory + purchases + carriage outwards – closing inventory

4. opening inventory + purchases – closing inventory

Q.

Which of the following statement is incorrect?

1. Gross profit is the difference between purchases and sales

2. Carriage outwards is shown in the Income Statement as a deduction from gross profit

3. Carriage inwards is included in the Income Statement as part of cost of sales

4. Net profit is gross profit less all expenses other than those included in the cost of goods sold

Q.

Given the following data: Purchases Rs. 54, 533, Carriage inwards Rs. 4, 324, Opening stock Rs. 17, 600, and closing stock Rs. 14, 342. The value of the cost of goods sold is:

1. Rs. 76, 457

2. Rs. 62, 115

3. Rs. 57, 791

4. None of the above

Q. Show the accounting equation on the basis of the following transactions

1. Mr. Kumar commenced business with cash Rs 50, 000.
2. Paid salary Rs 1, 200.
3. Purchased furniture Rs 5, 000.
4. Purchased goods from Rakesh for cash Rs 7, 500.
5. Sold goods to Shyam costing Rs 13, 000.
6. Paid Rent Rs 500.

Q.

Mr. Srinath maintains a columnar petty Cash Book on Imprest system. The Imprest amount is Rs 850. From the following information, show how his petty Cash Book would appear for the week ended 7th September 2011.

2011 Sept.
1	Balance in hand Rs 125, Paid for postage Rs 28, Stationary bill Rs 35, Refreshment expenses Rs 20.
3	Travelling and Conveyance Rs 34, Miscellaneous Expenses Rs 5, Refreshment expenses Rs 25.
4	Repair charges Rs 170.
5	Paid for postage Rs 21, Refreshment expenses Rs 22, Travelling expenses Rs 32.
6	Stationery Rs 47, Refreshment expenses Rs 19.
7	Miscellaneous Expenses Rs 12, Paid for postage Rs 7, Repair charges Rs 75.

Q.

Given the following data: Purchases Rs. 26, 000, Carriage inwards Rs. 890, Opening stock Rs. 4, 500, and closing stock Rs. 6, 130. The value of the cost of goods sold is:

1. Rs. 27, 040

2. Rs. 26, 150

3. Rs. 47, 450

4. Rs. 25, 260

Q. Freight inward appearing in Trial Balance are shown:

1. On the debit side of Profit & Loss Account
2. On the debit side of Trading Account
3. On the liabilities side of the Balance sheet
4. None of these

Q. Sale of crockery (book value Rs.220)-Rs.280.What amount will be posted in the Income and Expenditure account ?

1. Rs. 60
2. Rs. 280
3. Rs. 220
4. Rs. 500

Q. Give one word/term or phrase for each of the following statements.

Carriage paid on sale of goods

Q.

Enter the following transactions in an analytical petty cash book on Imprest systerm for June, 2011. Imprest money was maintained at Rs 1, 700.

2011 Jun.
1	Cash Balance Rs 135.
2	Gave gift to clerk Omkar Rs 151.
5	Paid for sending registered post and speed post Rs 104.
7	Washing charges paid to peon Rs 72.
10	Paid lunch bill of travelling salesman Rs 143.
13	Gave loan to peon Arun Rs 250.
16	Paid for cartage Rs 80.
19	Purchased chair for office use Rs 200.
22	Purchased stamp pad, paper clips and carbon paper Rs 107.
26	Purchased office files Rs 90.
30	Paid for repairs of machinery Rs 153.

Q. A sales of Rs 2, 000 wrongly entered in the purchase book leads to a correction in which of the following?

1. Decreases the gross profit by Rs. 2, 000.
2. Increases the gross profit by Rs. 2, 000.
3. Increases the gross profit by Rs. 4, 000.
4. None of the above

Q. Assuming no returns outwards or carriage inwards, the cost of goods sold will be equal to _______.

1. opening stock plus purchases plus closing stock
2. sales less gross profit
3. closing stock less purchases plus opening stock
4. purchases plus closing stock less opening stock