1. Which of the following item is shown in the Receipt and Payment account?
Correct : D. Both the items of capital and revenue nature which are received during the
2. Any income arising from special fund will be credited to
Correct : D. Special fund in the Balance sheet
3. There are 100 members each p aying an annual subscription of 500. The Receipt and Payment account shows arrear subscription of 4,500, advance subscriptions 6,000 and current 44,500. How much amount to be credited in the Income and Expenditure account?
Correct : D. 50,000
4. When opening stock 50,000; closing stock 40,000; purchases 1,90,000 profit margin is 16.67% on sales, the sales are:
Correct : A. 2,40,000
5. Goods bought for 25,000 passed through sales day book will result in
Correct : D. Increase in gross profit
6. Which of the following will result in disagreement of Trial Balance?
Correct : D. Under casting cash book by 1,100
7. In a joint venture X and Y sharing p rofit and loss equally, X purchased goods costing of 40,000 and Y sold the goods for 50,000. X is entitled to get 1% commission on purchase and Y is entitled to get 5% commission on sales, the profit will be
Correct : B. 7,100
8. What is the nature of joint venture with co-venture account?
Correct : B. Personal account 2
9. Which of the following term is applicable about consignment?
Correct : A. Sale of goods
10. Retirement of bill means
Correct : D. making payment before the due date.
11. Which one of these documents is not required for bank reconciliation?
Correct : C. Previous year’s balance sheet
12. In a overdraft balance as per cash book, a cheque of 1,250 deposited into bank but not
recorded in cash book will be
Correct : A. deducted by 1,250
13. Which of these errors affects only one account?
Correct : D. All of the above
14. Which of the following error is an error of principle?
Correct : B. 5,000 incurred on installation of new plant debited to salary a/c
15. In case of depreciable assets are revalued, the provision for depreciation is based on
Correct : D. the revalued amount over the estimate of the remaining useful life of such asset.
16. Trade discount is allowed at the time of sale of goods.
Correct : C. is not recorded in books of accounts
17. A debit note issued to a creditor for goods returned is to be recorded in the
Correct : A. Purchase return book
18. The determination of expenses for an accounting period is based on the concept of 3
Correct : B. Periodicity concept
19. Decrease in the amount of creditors results in
Correct : C. Decrease in cash
20. Subscription received in advance to be shown in
Correct : A. Liability side of the balance sheet
21. Which of the following is an accounting equation?
Correct : B. Capital = Assets – Liabilities
22. AS – 09 deals with
Correct : C. Revenue Recognition
23. Y-draws a trade bill of 12,000 for 6 months on X. After holding the bill for 2.5 months, Y
discount the bill with bank @ 10% p.a. The amount of discount on bill is
Correct : B. 350
24. Bills Receivable books is part of the
Correct : A. Journal
25. X of Delhi send out certain goods at cost + 25% of cost. Invoice value of goods is 1,20,000. 4/5th of the goods were sold by consignee at 1,00,000. Commission @ 2% up to invoice value and 10% of any surplus above invoice. The amount of commission will be
Correct : B. 2,320
26. If X co-venture takes away of goods under memorandum Joint Venture Method then he will
debit these goods in his books to
Correct : C. Personal Account
27. At the end of the year Bad Debts Recovered Account is
Correct : C. Credited to Profit & Loss Account
28. As regards the accounting treatment, Legacy should be
Correct : B. capitalized
29. Sales of 6,570 is recorded in the sales book as 6,750. Such Error is known as
Correct : C. Error of Commission
30. Which of the following is correct?
Correct : C. Cost of Goods Sold + Closing Stock – Opening Stock = Purchase
31. Provision for bad debt is made as per the
Correct : B. Conservatism concept
32. Capital expenditures are shown in the
Correct : A. Balance Sheet
33. Import duty of raw material purchased is a
Correct : A. Revenue Expenditure
34. Life Insurance Corporation Account is a
Correct : B. Artificial Personal Account
35. Goods taken from business for personal use by the proprietor should be credited to
Correct : D. Purchase a/c
36. A cash book with discount and bank column is called as
Correct : C. Three Column Cash Book
37. The periodical total of Returns Inward Day Book is posted to 5
Correct : B. Debit of Sales Return Account
38. The process of transfer of entries from day book to ledger is called as
Correct : D. Ledger Posting
39. Which financial statement represents the a ccounting equation as – Assets = Liabilities +
Owner’s equity?
Correct : C. Balance Sheet
40. The Depreciation Account is closed at the end of the year by transfer to the
Correct : B. Profit and Loss a/c
41. The original cost of the machine is 19,00,000; machine installation charges are 1,00,000; working life of the machine is 5 years and residual value is 40,000. If the depreciation is charged on Straight Line basis then 4th year’s depreciation will be:
Correct : C. 3,92,000
42. Whenever errors are noticed in the accounting records, they should be rectified.
Correct : B. without waiting the accounting year to end.
43. A purchase of 49,500 from Shiva was recorded in Purchases Book as 59,400, the profit would show
Correct : B. a decrease of 9,900
44. From the following details ascertain the adjusted bank balance as per Cash Book – overdraft as per Cash Book 1,60,000; cheque received entered twice in the Cash Book 10,000; credit side of bank column cash short by 1,000; bank charges amounting to 400 entered twice:
Correct : D. 1,70,600
45. When credit balance as per pass book is the starting point of a Bank Reconciliation
Statement then bank charges are
Correct : B. Added
46. At the time of dishonor of an endorsed bill, which account would be credited by the
drawee?
Correct : B. Drawer’s Account
47. At the en d of the accounting year bills receivable discounted were 32,000 would be
shown
Correct : B. on Assets side of the Balance Sheet
48. X sends out goods to Y, costing 3,60,000. Goods are to be sold at cost plus 25% on sales. The consignor asked consignee to pay an advance for an amount equivalent to 60% of sales value. The amount of advance will be
Correct : A. 2,88,000
49. X sends out certain goods to Y, costing 1,50,000 at cost plus 25% on invoice price. ¾ of the goods were sold by R at 1,76,000. Commission 5% upto invoice value a nd 10% of any surplus above invoice value. The amount of commission will be
Correct : C. 10,568.75
50. A purchased goods costing 2,60,000 for joint venture with B. B sold a major part of the goods at cost plus 25% on cost, for 2,50,000. Balance of goods were taken over by B at cost less 10%. Find out profit/loss on Joint Venture.
Correct : C. 44,000
51. Which of the following account(s) is (are) maintained in the joint venture when separate set
of books are maintained?
Correct : C. Co-venturer a/c
52. At the time of preparation of financial accounts, balance of Bad Debts Recovered Account
will be transferred to
Correct : D. Profit & Loss Appropriation a/c
53. In case of not for profit making concern, endowment fund receipt is treated as
Correct : B. Revenue Receipt
54. Any donation received for a specific purpose should be credited to
Correct : A. Income and Expenditure Account
55. Income and Expenditure account shows subscription at 2,50,000. Subscriptions accrued in the beginning of the year and at the end of the year were 25,000 and 37,500 respectively. The amount of subscriptions received appearing in re ceipts and payments account will be
Correct : B. 2,75,000
56. Which of the following transaction is not recorded in cash book?
Correct : A. Bad debts recovered
57. Credit purchase of fixed asset is recorded in
Correct : C. Cash book
58. Expenses paid but not accrued means
Correct : A. Capital expenses
59. Till the discounted bill is paid by the acceptor, it remains as
Correct : C. an asset
60. The amount of yearly depreciation under written down value method
Correct : A. remains same over the years
61. Goods purchased from Mr. A but wrongly entered in the account of Mr. B. The rec tification
of error will result in
Correct : B. decrease in gross profit
62. When cash received for services rendered in the past
Correct : C. Profit increases
63. Stock in the hand of the consignee is valued
Correct : D. at consignment price.
64. Noting charges are paid by
Correct : A. the drawee
65. The valuation procedure for stock is cost or net realisable value, whichever is lower. The
procedure follows as per
Correct : C. Money Measurement Concept
66. When incomes recognised on cash basis and expenditure recognised on accrual basis, the
system termed as
Correct : D. Hybrid basis of accounting
67. Which one is not considered as capital expenditure?
Correct : D. Legal cost for buying property
68. Legal charges paid to defend a suit on firm’s factory site is
Correct : C. Deferred revenue expenditure
69. Profit and loss account is prepared for a period of one year by following the concept of
Correct : D. Periodicity Concept
70. The trial balance checks
Correct : D. Arithmetical accuracy
71. Errors in carry forward of closing balances from one year to another which affects
Correct : D. Both (B) and (C)
72. If a bill drawn on 13th July 2018 for 60 days, payment must be made on
Correct : D. 12th September, 2018
73. The manufacturing account is prepared
Correct : A. to ascertain the cost of goods manufactured.
74. Which one of the following is not a financial statement?
Correct : A. Trial Balance
75. Any revenue expense for which a separate fund is available will be
Correct : C. debited to the separate fu
76. ________________________is not objective of accounting.
Correct : A. Gives accurate information
77. Which of the following is not a paper transaction?
Correct : A. Charge of depreciation
78. Which of the following is capital expenditure?
Correct : D. Annual subscription
79. Advertising expenses for launching a new product of the company is____________.
Correct : C. Deferred revenue expenditure
80. ___________________does fulfill the function of both a journal and a ledger.
Correct : B. Cash book
81. Which of the following is artificial personal account?
Correct : A. SBI account
82. Accounting cycle ends with preparation of______________.
Correct : D. the closing entries record
83. Journal proper uses to record _________________.
Correct : B. all cash purchases of assets other than goods
84. In case of, deposited of c heque into bank but not collected, the balance is less as per
________________.
Correct : B. Pass book
85. Accounting does not record non-financial transactions because of
Correct : A. Entity concept
86. Narration is given at the end of
Correct : D. Each journal entry
87. Which one of the following is an example of Personal Account?
Correct : D. Creditor
88. 5,000 incurred for up gradation of computer by installation of 128 MB Ram is
Correct : C. Capital expenditure
89. Cost of goods purchased for resale is an example of
Correct : A. Revenue expenditure
90. Insurance claim received on account of machinery damaged completely by fire is
Correct : A. Capital receipt
91. An expenditure is capital in nature when
Correct : B. It increases the quantity of fixed assets.
92. A withdrawal of cash from business by the proprietor should be credited to
Correct : C. Cash Account
93. Cash book is a form of
Correct : A. Ledger
94. A sale of goods to Laxman for cash should be debited to
Correct : B. Cash A/c
95. The debts written off earlier as bad, subsequently recovered are
Correct : B. Credited to bad debt recovery A/c
96. Which one of the following is an external cause for depreciation
Correct : D. Obsolescence
97. Original cost of a machine is 1,50,000, residual value 10,000, if depreciation is charged @
105 per annum under WDV method then depreciation for 3rd year will be
Correct : C. 12,150
98. On which of the following asset, depreciation is charged on ‘Depletion method’
Correct : D. Wasting asset like mine and quarries
99. If a sum of 1,500 received from Laxman (debtor) has not been recorded in the books, the
Correct : D. None of the above
100. It goods worth 1,750 returned to suppler is wrongly entered in sales returned book as
1,570 then