MULTIPLE CHOICES QUESTIONS

CHAPTER 12: SUSPENSE ACCOUNTS

1. The account of Minor Head “Suspense” under those functional Budgeted Major Heads of
Accounts where expenditure on Works is involved is
(a) 129 (b) 107
(c) 800 (d) 799

2. The account of Minor Head “Suspense” under those functional Budgeted Major Heads of
Accounts where expenditure on Works is involved is divided into three (3) distinct sub heads. Pick the
incorrect one
(a) Material (b) Stock
(c) Misc. Works Advances (d) Workshop

3. Pick the correct ones

(i) The sub heads under minor head Suspense are of temporary character
(ii) All the transactions recorded under them, are ultimately removed either by payment
or recovery in cash or by adjustment.
(iii) These transactions consist of both debit and credit
(iv) The debit is treated as reduction of expenditure when making up the account of
Major Head

(a) i, ii and iii (b) ii, iii and iv

(c) i, iii and iv (d) All of the above

4. The Minor and Major Head of the MPSSA are

(a) 107/8658 (b) 129/8658
(c) 799/8658 (d) 800/8658

5. The accounts of MPSSA is operated to account for the settlement of dues of the Suppliers of
Stores
(a) If payment is not made in the same month in which the stores have been received
(b) If payment is not made on the date on which the stores have been received
(c) If payment is made without the store has been received in the month of payment
(d) If payment is made without the store has been received on the date of payment

6. Minor 107-Cash Settlement Suspense Accounts under Major Head 8658 is operated for
settlement of
(a) Advance payment
(b) Inter-departmental transactions with Cabinet Secretariat and Ministry of Defence.
(c) Inter-departmental transactions with other departments of the same Govt.
(d) Inter-departmental transactions with other Govt, Non-Govt. including Local Bodies
and Private parties.

7. When materials are received from a supplier or from another department in India or abroad,
the value of the stores should be
(a) Credited To MPSSA (b) Debited to MPSSA
(c) Credited to CSSA (d) Debited to CSSA

8. Pick the correct ones

(i) When materials are received for a specific work, the MPSSA will be credited
immediately and work accounts is debited.
(ii) When materials are received for stock and payment has not been made during that
month, the MPSSA will be credited on closing the accounts of the month.

Prepared by Deepak Kumar Rahi, Adr/AAO (Local Audit/Patna)

 (iii) A single transfer entry order known as Omnibus Transfer Entry Order, Form 53A may
be prepared for all purchases of stores made for specific works in a sub-division during a
month and so a combined entry for all transactions during the month took place, the entry
being attested at once
(iv) Value of materials should be debited in works abstract under the relevant sub-head
such as Contractor-OT or Material or final charges as the case may be

(a) i, ii and iii (b) ii, iii and iv

(c) i, ii and iv (d) All of the above

9. State whether true or false

If any item of supply be paid for during the same month, the amount paid should be noted in
the relevant column and at the end of the month, the total of all items paid for during the same month
should be worked out and only the net amount credited under Material Purchase Settlement
Suspense Account.
(a) True (b) False

10. The Omnibus Transfer Entry Order should be incorporated in the transfer entry book only at
the end of the month so that
(a) Reconciliation between the quantity and value account may be secured.
(b) Verification of stores with specification may be completed diligently
(c) It may be not necessary to copy out in detail the transactions paid for during the
month.
(d) All of the above.

11. The TEO is prepared in

(a) Single copy (b) duplicate
(c) triplicate (d) Quadruplicate

12. Pick the incorrect one regarding disposal of TEO

(a) One copy to PAO
(b) One copy to Transfer entry Book of DO (c) One copy to Suspense Register
(d) One copy to Stock Account

13. When the actual value of the materials is not known, an estimated figure should be adopted,
any difference being adjusted, as soon as known should be afforded in the MPSSA by
(a) a debit entry (b) a debit or credit entry
(c) a credit or minus credit entry (d) a debit or minus debit entry

14. When the price of the materials is paid or adjusted by transfer, in MPSSA the payment should
be
(a) Debited (b) Minus credited
(c) Minus Debited (d) Credited

15. State whether true or false

If the amount admitted in payment exceeds the amount credited to “M.P.S.S.A.” the
difference should be charged direct to Stock or to the work concerned, and should be shown as minus
entry in the MPSSA.
(a) True (b) False

16. Pick the incorrect one

(a) Repayment of lapsed deposits applies mutatis mutandis to repayment of lapsed
balances of MPSS Account.
(b) Outstanding balances lapsed to revenue and requiring adjustment on the basis of Old
PAO Memos should be equated to repayment of lapsed Deposits
Prepared by Deepak Kumar Rahi, Adr/AAO (Local Audit/Patna)
 (b) The write back of such lapsed balances of “Material Purchase Settlement Suspense
Account” are in the nature of corrections of erroneous adjustments and no pre-check of such
transaction is contemplated
(d) Pre check by PAO would be necessary, if the amount is required to be paid to any
party

17. The MPSS Account is maintained in Suspense Register in form

(a) CPWA 67 (b) CPWA 67A
(c) CPWA 69 (d) CPWA 70

18. The details of MPSSA in Suspense Register is recorded in a separate set of folios for each of
two headings
(a) Purchases from India & Purchases from abroad
(b) Purchases for Stock and Purchases for specific Works
(c) Purchases for Division and Purchases for contractors
(d) Purchases for Stock and Purchases for Workshop

19. State whether true or false

The head “stock” is opened in all divisions in which stock of materials is maintained for general
purposes. In divisions in which no stocks are maintained, this account should be opened only when
any manufacture operations are undertaken
(a) True (b) False

20. The money limit for the stock reserve of a division is prescribed by
(a) SE (b) DG (Works)
(c) PAO (d) Admin. Min/Administrator

21. Pick the correct ones

(i) Excesses over the reserve limit as prescribed by the competent authority are not
permissible under any circumstances
(ii) The account head “stock” is debited with all expenditure connected with the
acquisition of stock materials, and with all manufacture operations.
(iii) The stock account is credited with the value of materials issued to works, or sold,
transferred or otherwise disposed of.
(iv) The balance of account will represent the book value of the materials in stock plus the
unadjusted charges, etc., connected with manufacture.

(a) i, ii and iii (b) ii, iii and iv

(c) i, ii and iv (d) All of the above

22. The Stock account are divided into 11 sub-heads such as Small Stores, Building Materials etc.
The first eight sub heads may be replaced by locally by other suitable Heads, if necessary. Pick the
incorrect one regarding the permanent/constant sub heads are
(a) Land, Kilns etc. (b) Manufacture
(c) Handling and other Incidental Charges (d) Misc. Stores

23. Pick the incorrect one

(a) The general account of the receipts, issues and balances of the suspense head, “Stock”
should be maintained in the Suspense Register, Form 67
(b) A separate account should be kept in respect of each sub-head, the transactions of
the several sub-divisions being detailed therein as separate items and the totals of all sub-
divisions as another
(c) Transfers within the division should be accounted for against a single item “Deduct
Transfers within Division” before the total for the entire head “Stock” is struck.

Prepared by Deepak Kumar Rahi, Adr/AAO (Local Audit/Patna)

 (d) Expenditure booked under the sub-head “Handling and other incidental charges”
should be brought to nil at the time of closing the accounts of the month.

24. Transactions recorded under Sub-head “Miscellaneous Works Advances” under the Minor
Head “799 – Suspense” below the functional Major/Sub-Major Heads concerned are divided into
(a) Two classes (b) Three classes
(c) Four classes (d) Five classes

25. Transactions under which of the following accounts does not fall under Minor Head 799-
Suspense
(a) Sale of item
(b) Expenditure incurred on Deposit works in excess of deposits received
(c) Losses, Retrenchment, error etc.
(d) Other items

26. State whether true or false

In case of absence or insufficiency of sanction or appropriation except for Deposit Works shall
be debited to Sub head other items.
(a) True (b) False

27. When stores of any kind are sold on credit, their value plus the Supervision charges, if any,
should be debited to “Miscellaneous Works Advances” under the detailed head “Sales on Credit” so
that
(a) the accounts of Stock or Works from which the materials are issued may be kept
correctly
(b) the recovery of the value from the local body or individual concerned may be watched
through the regular accounts.
(c) Both of the above
(d) None of the above

28. Under the heading “Losses, retrenchments, errors etc.” subordinate to Minor Head 799 –
MWA appear the following. Pick the incorrect one
(a) Deficiencies in cash or stock (b) Actual losses of cash or stock
(c) Errors in accounts awaiting adjustment
(d) Retrenchments and losses of other kinds duly recovered from Government Servants.

29. All debits, the allocation of which is not known or which cannot be adjusted until recovery or
settlement is effected or write off ordered will be recorded under
(a) Losses, Retrenchment, error etc.
(b) Errors in accounts awaiting adjustment
(c) Other items
(d) Any of the above.

30. The sub head “Other items” is meant for the following except
(a) debits, the classification of which cannot be determined at once;
(b) recoverable debits not pertaining to the accounts of a work;
(c) recoverable outstanding appertaining to works, the accounts of which are closed
(d) recoverable outstanding pertaining to a Deposit Work

31. The share of municipal taxes paid by Government on behalf of licensees of Government
buildings should be debited to which sub head of the MWA pending recovery
(a) Other items (b) Losses, Retrenchment, error etc.
(c) Expenditure incurred on Deposit works in excess of deposits received
(d) Misc. Recovery

Prepared by Deepak Kumar Rahi, Adr/AAO (Local Audit/Patna)

32. Pick the incorrect one
(a) Items in the “Miscellaneous Works Advances” account are cleared either by actual
recovery, or by transfer, under proper sanction or authority to some other head of account.
(b) Items or balances which may become irrecoverable should not be so transferred until
ordered to be written off.
(c) The detailed accounts of this head should be kept in Form 70, Register of Misc. Work
Advances.
(d) The detailed accounts of this head should be kept in Form 67, Suspense Register.

33. Pick the correct ones

(i) For items falling under the class “Expenditure incurred on Deposit Works in excess of
deposits received”, details are not necessary in Suspense Register, as these are recorded in
the Schedule of Deposit Works, Form 65.
(ii) For each of the other three classes of items namely Sale on credit, Losses,
Retrenchment etc and Other items, a separate set of folios should be reserved.
(iii) All the items under each class should be detailed, so that their clearance may be
watched individually.
(iv) An abstract should be prepared to show the totals of all the classes.

(a) i, ii, and iii (b) i, iii and iv

(c) i, ii and iv (d) All of the above

34. State whether true or false

When a workshop has been established, all direct outlay on the jobs executed and on other
operations of the workshop is passed through the suspense head “Workshop Suspense”
(a) True (b) False

35. Pick the incorrect one

(a) A separate account is kept under it of each job or operation, so that all charges relating
to each may be collected and charges of a general nature may be suitably distributed over all
the jobs or operations affected, before the total cost recoverable is determined.
(b) The recorded expenditure on a job is removed from the suspense head only when and
to the extent that, an adjustment is effected against the deposit received or against the service
or other head concerned .
(c) Such removal is effected by a credit to the account of the job.
(d) Accordingly, when any charges are transferred from one job or operation to another,
the transfer should be made by a credit and minus credit entry.

36. State whether true or false

On the completion of a job, all outstanding charges on it must be debited, as soon as possible,
to the head concerned, but in cases where this cannot be done, as in the case of expenditure incurred
in excess of the deposit received, the unadjusted amount should be transferred to the head
“Miscellaneous Works Advances” pending settlement.
(a) True (b) False

Prepared by Deepak Kumar Rahi, Adr/AAO (Local Audit/Patna)

 ANSWERS

Ques. Answer Relevant Rule/Para/Remarks, if any

No
1 D 13.1.1
2 A 13.1.1
3 A 13.1.1 (credit is regarded as reduction of exp)
4 B 13.1.1
5 A 13.2.1
6 B 13.1.1
7 A 13.2.1
8 C 13.2.2 (iv) (Entry should be written up as each transaction takes place)
9 A 13.2.2 (iii)
10 D 13.2.2 (iv)
11 C 13.2.2 (v)
12 D 13.2.2 (v)
13 C 13.2.3
14 B 13.2.4
15 B 13.2.4 (should not be shown as minus entry in the MPSSA)
16 B 13.2.5
17 A 13.2.6
18 B 13.2.6
19 A 13.3.1
20 D 13.3.2
21 B 13.3.2 & 13.3.3
22 D 13.3.4
23 D 13.3.5 & 6 (at the time of adjustment of P &L of stock account i.e. end of year)
24 C 13.4.1
25 A 13.4.1 (Sale of item on credit only form the part of MWA and not all sales)
26 B Note_13.4.1 (should not booked under MWA instead addl. Allotment/sanction
shall be sought.)
27. C 13.4.2
28 D 13.4.4 (not duly recovered but recoverable)
29 C 13.4.5
30 D 13.4.5
31 A Note_13.4.5
32 C 13.4.6 & 13.4.7
33 D 13.4.7
34 A 13.5.1
35 D 13.5.2 (in such case debit when received or minus debit when transferred)
36 A 13.5.4

Prepared by Deepak Kumar Rahi, Adr/AAO (Local Audit/Patna)