1. Selling expenses should be divided among the different departments on the basis of ______
Correct : A. Sales
2. Building expenses should be divided among the different departments according to the ______
by each departments
Correct : A. Area occupied
3. Balance of trading account is a transfer to
Correct : C. Profit and loss account
4. Depreciation on machinery this transaction initially shown on
Correct : B. Profit and loss account
5. The expenses which have been incurred to bring the goods or making the goods ready for sales is
called
Correct : B. Direct expenses
6. Packing of goods for protecting the goods is debited in the
Correct : C. Trading account
7. The balance of profit and loss account is called
Correct : A. Net profit /loss
8. Carriage out expenses are come under
Correct : D. Distribution expenses
9. Mines, quarries etc are
Correct : D. Wasting asset
10. The final accounts , when adjustment entry is passed ,it affects the minimum ________
Correct : B. Two account
11. The closing stock will appear in trial balance at the
Correct : D. None of these
12. Outstanding salary is shown on
Correct : A. Balance sheet
13. If closing stock appear on the trial balance it must have been ____
Correct : C. Deducted from the purchases
14. Discount on purchase will be
Correct : B. Credited to profit and loss account
15. Resources which are invested in permanent asset are called
Correct : C. Block capital
16. Sales is equal to
Correct : C. Gross profit + cost of goods sold + direct expenses
17. The premium paid on the life policy of the proprietor is debited to
Correct : D. Drawing account
18. Expenses which have become due during the accounting period for which the final accounts have
been prepared but have not yet been paid is called
Correct : B. Outstanding
19. Balance sheet is a _______
Correct : C. Statement
20. Income tax paid for the proprietor from the business is
Correct : C. Deducted from capital
21. In the balance sheet of sole trader business , assets are managed in the order of
Correct : B. Liquidity
22. Under ______ system the buyer does not get ownership of goods immediately
Correct : B. HP
23. ________ means the price at which the goods can be purchased by the hirer for ready cash
Correct : C. Cash price
24. _______ is the initial payment made at the time of signing the hire purchase agreement
Correct : A. HP price
25. The difference between hire purchase price and the cash price is called ______
Correct : A. Hire charges
26. Under ______ system , the buyer gets ownership of goods immediately
Correct : A. Installment
27. When an asset is acquired on hire purchase system, the asset account is debited with _______ of
the assets in the books of the hire purchaser.
Correct : B. Cash price
28. In order to deal with the re possession the hire vendor operates an account called _______
Correct : C. Goods repossessed account
29. Under _____ system , the hire vendor has a right to take back the goods
Correct : B. HP
30. Single entry system of accounts is maintained by ______
Correct : C. Sole trader
31. The statement of profit or loss is prepared according to _______ method to calculate profit or
loss under single entry system
Correct : B. Statement of affairs method
32. Under single entry system , drawings is _____ to know gross profit
Correct : A. Added
33. Receipts and payment account is a summary of ______
Correct : C. Cashbook
34. Excess of income over expenditure of non trading concern is called _______
Correct : C. Surplus
35. Income and expenditure account is a type of ______
Correct : C. Profit and loss account
36. The amount of money owed by a business to outsider is called _____
Correct : C. Liabilities
37. The properties and possession of a business are termed as ________
Correct : A. Asset
38. Prepaid expenses appearing in trial balance will appear in _____
Correct : C. Balance sheet asset side
39. Net profit / loss is transferred to the ______ account
Correct : C. Capital account
40. All ________ expenses are recorded in the trading account
Correct : D. None of these
41. ________ expenses are shown in the profit and loss account
Correct : A. Indirect
42. Which English alphabet is similar to the shape of an account?
Correct : B. T ;
43. Gross Profit is the difference between
Correct : A. Net Sales and Cost of goods sold ;
44. Process of spreading cost 3. Profit and Loss A/c
4. Check arithmetic accuracy 4. Accounting for Fixed Asset
Correct : C. (1, 4) (2, 2) (3, 1), (4, 3)
45. The basic concepts related to Balance Sheet are
Correct : D. Both (a) and (b) above
46. The basic concepts related to P & L Account are
Correct : D. Both (a) and (b) above
47. Which of the following is (are) characteristic(s) of Bad Debt?
Correct : D. All of the given options
48. Only the significant events which affect the business must be recorded as per the principle of
Correct : C. Materiality
49. P & L Account is prepared for a period of one year by following [Hints: (c) P&L A/C is prepared for a period of one year by following the concept of Accounting Period.]
Correct : C. Accounting Period Concept
50. If the Going Concern concept is no longer valid, which of the following is true?
Correct : D. Land held as an Investment would be valued at its realizable value
51. Under which of the following concepts are shareholders treated as creditors for the amount they paid
on the shares they subscribed to?
Correct : B. Duality Concept
52. The underlying accounting principle(s) necessitating amortization of intangible asset(s) is/are
Correct : B. Realization Concept
53. Which of the following practices is not in consonance with the convention of conservatism?
Correct : B. Creating Provision for Discount on Creditors
54. The accounting measurement that is not consistent with the Going Concern concept is
Correct : C. The Transaction Approach
55. Recording of Fixed Assets at cost ensures adherence of
Correct : D. Both (a) and (b) above
56. Omission of paise and showing the round figures in financial statements is based on
Correct : C. Materiality Concept
57. X Ltd., purchased goods for ` 5 lakh and sold 9/10th of the value of goods for ` 6 lakh. Net expenses during the year were ` 25, 000. The company reported its net profit as ` 75,000. Which of the following concept is violated by the company?
Correct : C. Matching
58. Accounting does not record non- financial transactions because of
Correct : D. Money Measurement Concept
59. Mr. Rohit, owner of Rohit Furniture Ltd., owns a personal residence that cost ` 6,00,000, but has a market value of ` 9,00,000. During preparation of the financial statement for the business, the entire value of property was ignored and was not shown in the financial statements. The principle that was followed was
Correct : D. The concept of Duality Principle
60. Provision for bad debt is made as per the
Correct : B. Conservatism Concept
61. Fixed Assets and Current Assets are categorized as per concept of
Correct : B. Going Concern
62. Which of the following is NOT a revenue expenditure?
Correct : A. Petrol consumed in motor vehicles ;
63. Which of the following statements is true?
Correct : C. Provision for bad and doubtful debts is created in recognition of conservatism concept
64. The expenses and incomes pertaining to full trading period are taken to the Profit and Loss Account of a business, irrespective of their payment or receipt. This is in recognition of
Correct : C. Accrual Concept
65. Which of the following is an example of Capital Expenditure?
Correct : D. Customs duty on Import of Machinery
66. In the creditors control account, all of the below exist except:
Correct : C. Cash purchases ;
67. Ledger contains various ___________ in it
Correct : C. Accounts ;
68. Which of the following concepts assumes that a business will last indefinitely?
Correct : B. Going Concern
69. Which of the following is an example of Personal Account?
Correct : D. Creditor
70. Payment received from Debtor
Correct : C. Results in no change in the Total Assets
71. The ____________ in a ledger helps in locating the accounts contained in it
Correct : A. Folio ;
72. 12.2012 —
Correct : B. 1,35,000 ;
73. In which of the following statement opening stock is shown?
Correct : A. Profit and loss account (Right Answer) ;
74. The process of transfer of entries from day book to ledgers is called _______________
Correct : D. Ledger posting
75. Goods returned from X is entered as
Correct : C. Debit Sales Return A/c; Credit X A/c
76. When Fixed Assets are sold
Correct : D. There is no change in the Total Assets
77. Withdrawal of goods from stock by the owner of the business for personal use should be recorded by
Correct : C. Debiting Drawings Account and Crediting Stock Account
78. Which of the following transactions would cause a change in ―owners‘ equity‖?
Correct : B. Payment of Dividends and Unprofitable Operations
79. Withdrawals by proprietor would
Correct : A. Reduce both Assets and Owner‘s Equity
80. Which of the following is true?
Correct : D. The purchase of an asset such as office equipment, either for cash or on credit, does not change the Owners‘ Equity
81. Which of the following statements is/are true?
(i) Cash Book records all cash receipts and cash payments
(ii) Cash Book records all sale and purchase transactions of goods both in cash and on credit
(iii) Cash Book records discount on Cash Payments
Correct : D. Both (i) and (iii) above
82. Trade discount allowed at the time of Sale of goods.
Correct : D. Is not recorded in Books of Accounts
83. The Periodical total of the Sales Return Book is posted to the
Correct : B. Debit of Sales Return Account
84. If the Petty Cash fund is not reimbursed just prior to year end and an appropriate adjusting entry is not made, then
Correct : C. Cash is overstated and expenses are understated
85. XYZ Ltd. Paid wages of ` 8,000 for erection of machinery. The journal entry for the transaction is
Correct : B. Debit machinery and credit cash
86. Purchase of goods on credit
Correct : C. Increases both Assets and Liabilities
87. Purchase of Raw Material for Cash
Correct : B. Leaves total Assets unchanged
88. Which of the following is not an Asset?
Correct : C. Profit and Loss Account (Credit Balance)
89. The process of balancing of an account involves equalization of both sides of the account. If the debit side of an account exceeds the credit side, the difference is put on the credit side. The said balance is
(i) A Debit balance
(ii) A Credit balance
(iii) An expenditure or an Asset
(iv) An Income or a Liability
Correct : C. Both (i) and (iii) above
90. Ledger is also called
Correct : A. Principal book of accounts ;
91. Which of the following transactions of a business is/ are recorded in Journal Proper?
(i) Purchase of goods on credit
(ii) Sale of Office Furniture for cash
(iii) Discounting of Bill of Exchange with a bank
(iv) Endorsement of a Bill of Exchange in settlement of debt of the business
Correct : B. Only (iv) above
92. Which of the following statements is/are true?
(i) Drawings Account is a Nominal Account
(ii) Capital Account is a Real Account
(iii) Sales Account is a Nominal Account
(iv) Outstanding salaries account is a Nominal Account
(v) Patents Account is a Personal Account
Correct : B. Only (iii) above
93. The entry to record the collection of cash from Sundry Debtors would involve a
(i) Debit to Sundry Debtors
(ii) Debit to Cash Account
(iii) Credit to Sundry Debtors
(iv) Credit to Cash Account
Correct : C. Both (ii) and (iii) above
94. ABC Ltd. makes payments to its Sundry Creditors through cheques and the Cash Discount received on these payments is recorded in the Triple-columnar Cash Book. In the event of dishonour of any such cheques, the discount so received should be written back through
(i) A debit to discount column of the Cash Book
(ii) A credit to discount column of the Cash Book
(iii) A credit to bank column of the Cash Book
(iv) A debit to Discount Account through Journal Proper
(v) A credit to Creditor‘s Account through Journal Proper
Correct : D. Both (iv) and (v) above
95. R Ltd. makes purchases on credit. If the purchases are not as per the specifications, the company
returns them to the suppliers. The book, that is used to record such returns is
Correct : B. Returns Outward Book
96. If Office Equipment is purchased for cash, what effect will this transaction have on the financial
position of the company?
Correct : A. There is no change in the Assets, Liabilities and Owners‘ Equity
97. The periodical total of discount column on receipts side of a Triple Column Cash Book is recorded to
the
Correct : C. Debit side of Discount Account
98. Which of the following statements is false?
Correct : B. Credit balance of Bank Pass Book is an overdraft
99. Purchase of Fixed Assets on credit is originally recorded in
Correct : D. Journal Proper
100. If you start with cash book favorable balance in Bank Reconciliation Statement, which item will be
added?
Correct : C. Any amount directly collected by bank on behalf of customer but not recorded in cash book