Recording Managerial Commission

Q.

Net profit of a firm before charging manger's commission is Rs 21, 000. If the manager is entitled to 5% commission after charging such commission, how much manager will get as commission?

Q.

State the meaning of

(a) Outstanding expenses

(b) Prepaid expenses

(c) Income received in advance

(d) Accrued income

Q.

The effect of the adjustment entry of managerial commission payable on the asset side of the balance sheet is :

1. Current assets shall decrease

2. Shown as commission receivable

3. No effect on the asset side

4. Current assets shall increase

Q.

Rent paid on 1st October, 2014 for the year upto 30th September, 2015 was Rs. 1, 200 and rent paid on 1st October, 2015 for the year up to 30th September, 2016 was Rs. 1, 600. Find the rent payable as shown in the profit and loss account for the year ended 31st December.

Q.

If the manager is entitled to a commission of 5% on profit before deducting the commission and the profit before deducting the commission is Rs. 18, 900, what will be the commission?

Q.

If the profit before manager's commission is Rs. 80, 000 in the company ABC Ltd. & the manager is entitled to a commission of 5% after deducting the manager's commission, the amount of commission shall be:

1. Rs. 4, 000

2. Rs. 4, 190

3. Rs. 3, 810

4. None of the above

Q.

The managerial commission is classified as:

1. Asset

2. Capital

3. Income

4. Expense

Q.

A manager gets 5% commission on sales, the cost price of goods sold is Rs. 40, 000 which he sells at a margin of 20% on sale. Manager's Commission will be:

1. Rs. 2, 000

2. Rs. 2, 500

3. Rs. 2, 800

4. None of the above

Q.

Is it correct that the total of the purchase invoices recorded in the purchases book is posted to the debit side of the purchases account in the ledger and credited to the accounts of suppliers?

Q.

Rectify the following entries :

(i) Purchase of building was passed through purchase book amounting to Rs 80, 000.

(ii) Wages paid for construction of building was debited to wages account with Rs 20, 000.

(iii) Expenses of erecting of a shed amounting to Rs 3, 000 were debited to trade expenses account.

(iv) Wages paid for extension of building was debited to wages

Q. Outstanding expense are _________ to expense.

1. Deducted
2. Added
3. None of these.
4. No effect

Q.

While doing the adjustment entry for the managerial commission, which account shall be credited?

1. Managers account

2. Profit & loss account

3. Managers commission payable account

4. Asset account

Q. State whether the following Statements are True or False

1. There is need to provide depreciation if it is maintained with care.
2. Depreciation cannot be provided in case of loss in a financial year.
3. A Specific reserve can be created for any purpose.
4. Capital Reserves are not freely distributed as profits.
5. Under the written down value method depreciation is calculated on the original cost of an asset.
6. Depreciation is the process of valuation of asset.
7. Depreciation is a non-cash expense.
8. Secret reserves are disclosed in Balance Sheet.
9. General reserves is created to meet contingency liability.
10. Depreciation is charged only on fixed asset.

Q. Outstanding salary is shown as _______________.

1. By adjusting it in the P & L A/c
2. Both B and C
3. An asset in the balance sheet
4. A liability

Q. Show the treatment of prepaid expenses, depreciation, closing stock at the time of preparation of final accounts
(a) When given inside the trial balance.
(b) When given outside the trial balance.

Q. Answer in one Sentence only

To which account the amount of depreciation is transferred?

Q. Write the word/term/pharse which can substitute each of the following statement :

An account to which the balance in depreciation account is transferred.

Q. Unearned income account is a/an ___________.

1. Asset
2. Liability
3. Income
4. Expense

Q. The managerial commission is classified as .

1. asset
2. liability
3. income
4. expense

Q. _________ is made to know liability or expense pertaining to current accounting period.

1. Provision
2. Reserve
3. Appropriation
4. None

Q. Outstanding expense will be ______ to respective expense.

1. None of the above
2. added
3. deducted
4. neutralized

Q. If depreciation on asset is not provided than cost of asset will be _________.

1. Undervalued
2. Overvalued
3. Remain the same
4. None of the above.

Q. The adjustment entry for the managerial commission is:

Managers commission A/c Dr
To Managerial commission payable A/c

1. False
2. True

Q. While passing the adjustment entry for the managerial commission, managerial commission payable account is:

1. Credited
2. Debited