by Jovin Thomas
1. A person to whom the business owes money is called
(a) Debtor (b) Creditor (c) Manager (d) Partner
2. Decrease in the value of intangible asset is known as
(a) Depletion (b) Fluctuation (c) Appreciation (d) Amortization
3. Identify the source document for recording transactions in the Sales returns book.
(a) Invoice (b) Debit note (c) Credit note (d) Pay roll
4. Name the account which is temporarily opened to agree the trial balance artificially.
(a) Profit and loss account (b) Trading account (c) Suspense account (d) Temporary account
5. If the closing stock is given inside the trial balance, while preparing final accounts it appears,
(a) in the debit side of Trading account (b) in the credit side of Trading account
(c) in the assets side of Balance sheet (d) Both (b) and (c)
6. These type of errors affect the agreement of Trial Balance.
(a) Error of complete omission (b) Error of principle
(c) Compensating errors (d) Error of partial omission
7. The book in which all accounts are maintained is known as
(a) Journal (b) Ledger (c) Cash book (d) Sales book
8. Name the account which is prepared by a single entry trader to ascertain the value of credit sales.
(a) Total creditors A/c (b) Total debtors A/c
(c) Bills payable A/c (d) None of these
9. Operating Profit =
(a) Net Profit + Non-operating expenses + Non-operating incomes
(b) Net Profit + Non-operating expenses – Non-operating incomes
(c) Net Profit – Non-operating expenses + Non-operating incomes
(d) Gross Profit – Non-operating expenses + Non-operating incomes
10. Closing stock is valued at cost price or market price whichever is less – Conservatism
11. Every transaction has two aspects – Duality
12. Accounting records monetary events only - Money measurement
13. Frequent changes in accounting policies are not advisable – Consistency
14. Costs incurred by a business in the process of earning revenue are called as
(a) Capital Expenditure (b) Expenses (c) Capital (d) Assets
15. The process of recording transactions in journal is called as
(a) Posting (b) Balancing (c) Journalising (d) Totalling
16. Purchased machinery from Rajesh on credit will be recorded in
(a) Purchases Book (b) Purchases returns Book (c) Journal Proper (d) Cash Book
17. The amount of depreciation charged under Diminishing balance method
(a) increases every year (b) remains constant every year (c) equals to its scrap value
(d) decreases every year
18. The value of closing stock given in the Trial Balance will be shown on:
(a) the credit side of Trading account (b) the asset side of Balance Sheet
(c) the credit side of Profit & Loss account (d) both (a) & (b)
19. Assets sold on credit are entered in
(a) Cash book (b) Purchase book (c) Sales book (d) Journal proper
20. Bank reconciliation statement is prepared by
(a) Bank (b) Creditors (c) Account holder in a bank (d) Debtors
21. Which of the following is an error of commission?
(a) Wages paid for installation of machinery debited to wages account
(b) Purchased goods for cash not recorded in cash book
(c) Wrong balancing of Furniture account
(d) Sale of fixed assets credited to sales account
22. Which of the following is not included in the Financial statements of a sole trading concern ?
(a) Trading A/c (b) Balance Sheet (c) Cash Book (d) Profit and Loss A/c
23. The existence of business is separate from its owner – Business Entity Concept
24. Assets = Liabilities + Capital - Dual aspect Concept
25. The recording price of assets is its acquisition price - Cost Concept
26. Do not anticipate profit, but provide for all losses - Conservatism Concept
27. Which among the following is an intangible asset ?
(a) Goodwill (b) Building (c) Cash (d) Stock of goods
28. Sold goods on credit to Archana is recorded in
(a) Cash book (b) Purchases book (c) Sales book (d) Journal proper
29. The reason for the difference in bank balance as per cash book and pass book is revealed by
(a) Trial Balance (b) Balance Sheet (c) Bank Reconciliation Statement (d) Fund Flow Statement
30. ................ is a collection of all the accounts debited or credited in journal or day books.
(a) Journal (b) Ledger (c) Cash book (d) Sales book
31. The process of entering transactions in a journal is called
(a) Posting (b) Balancing (c) Journalising (d) Trial balance
32. Depreciation is charged on
(a) Fictitious assets (b) Intangible assets (c) Current assets (d) Fixed assets
33. Which among the following is not an objective of preparing Trial Balance?
(a) To check the arithmetical accuracy of Ledger accounts.
(b) To know the financial position of the business.
(c) To help in the preparation of financial statements.
(d) To help in locating errors.
34. Cash or other assets invested by the owner in the business is
(a) Fixed Asset (b) Capital (c) Current Asset (d) None of these
35. Credit sales of goods are recorded in the day book.
(a) Cash book (b) Petty Cash book (c) Sales book (d) Journal proper
36. Overdraft means _ _ balance of Cash book.
(a) Debit (b) Credit (c) Both (a) and (b) (d) None of these
37. Depreciation is charged on
(a) Current Assets (b) Fixed Assets (c) Current and Fixed Assets (d) None of these
38. A Trial balance is prepared to
(a) Assertain the arithmetical accuracy of Ledger Accounts
(b) Locating Errors
(c) Help in the preparation of Final Accounts
(d) All of the above
39. Writing-off the cost of intangible assets like Goodwill, Patents, Copyright etc. is
(a) Depreciation (b) Depletion
(c) Amortisation (d) Fluctuation
40. Amount invested by the owner in the business is called
(a) drawings (b) investment (c) capital (d) asset
41. A person who owes money to an enterprise – Debtor
42. Withdrawal of money or goods by the owner from the business – Drawings
43. Excess of revenue over expenses – Profit
44. Economic resources of an enterprise – Assets
45. Writing off the cost of intangible assets like patent, copy right etc. is known as
(a) Depreciation (b) Depletion (c) Amortization (d) Obsolescence
46. Amount invested by the owner in the business is called
(a) drawings (b) investment (c) capital (d) asset
47. ..... is an example of direct expense.
(a) Salary (b) Wages (c) Rent (d) Office expense
48. The person who owes money to the business is known as
(a) Debtor (b) Creditor (c) Partner (d) None of these
49. Amount invested by the owner in the business is called
(a) drawings (b) investment (c) capital (d) asset
50. Multiple types of taxes in goods and services were abolished through the introduction of
(a) VAT (b) GST (c) Octroi (d) Income tax
51. The insurance premium paid is 1,000 and pre-paid insurance amounted to 300. What is the amount of insurance premium to be shown in Profit and Loss account ?
(a) 1,300 (b) 1,000 (c) 300 (d) 700
52. Writing-off the cost of intangible assets like Goodwill, Patents, Copyright etc. is
(a) Depreciation (b) Depletion (c) Amortisation (d) Fluctuation
53. Amount invested by the owner in the business is called .
(a) drawings (b) investment (c) capital (d) asset
54. If the salary paid during a year is 5,000 and outstanding salary at the end of the year is 2,000, then, the amount of salary to be debited to profit and loss account is:
(a) 3,000 (b) 5,000 (c) 2,000 (d) 7,000
55. Depletion/Exhaustion –Decrease in the quantity of natural resources.
56. Amortization – Decrease in the value of intangible assets.
57. Fluctuation –Increase or decrease in the value of current assets.
58. Depreciation –Decrease in the value of fixed assets.
59. Trial Balance is
(a) An account (b) A principal book (c) A subsidiary book (d) A statement
60. Heavy expenditure incurred on advertising is
(a) Capital Receipt (b) Capital Expenditure
(c) Revenue Expenditure (d) Deferred Revenue Expenditure
61. The person who owes money to the firm is
(a) Debtor (b) Creditor (c) Owner (d) Manager
62. The principal book of account is
(a) Journal (b) Ledger (c) Purchase Book (d) Sales Book
63. Which of the following is correct ?
(a) Liabilities = Assets – Capital (b) Assets = Liabilities – Capital
(c) Capital = Assets + Liabilities (d) Capital = Liabilities – Assets
64. Sales Journal records
(a) Cash Sales (b) Credit Sales (c) Sales Returns (d) Purchase Returns
65. Favourable bank balance means
(a) Credit Balance in the Cash Book (b) Credit Balance in Passbook
(c) Debit Balance in the Cash Book (d) Both (b) and (c)
66. Creating provision for doubtful debt - Conservatism
67. Transactions are to be supported by source documents - objectivity.
68. Salary outstanding added to salary in P/L A/c - Matching concept.
69. Every transaction has a twofold effect - Dual aspect concept.
70. Ramesh, a dealer of Television, sold an old furniture to Rafeeque for 3,000 on credit. Identify the day book to record this transaction.
a) Purchase day book b) Journal proper c) Sales day book d) Cash book
71. Creatives Traders provides accounting information to its users whenever it is required for. Specify the qualitative characteristics of accounting'
(a) Understandability (b) Relevance (c) Comparability (d) Reliability
72. Suresh advanced 3 months salary to an employee of his firm. This advance salary is
(a) Revenue expense (b) Capital expense (c) Current asset (d) Current liability
73. Which accounting concept specifies the practice of crediting closing stock t the trading account?
(a) Cost concept
(b) Revenue realization concept
(c) Going concern concept
(d) Mating concept
74. Machinery purchased from Sheeba Industries Ltd on credit is recorded in
(a) Purchases day book
(b) Purchases ledger
(c) Journal proper
(d) Cash book
75. A furniture merchant used 2 chairs for his office use, which was credited in
(a) Purchases account (b) Furniture account (c) Office furniture account
(d) Drawings account
76. Find the odd one.
(a) Direct payment by bank on behalf of account hold
(b) Bank charges debited by bank
(c) Interest allowed by bank
(d) Dishonor of a bill discounted with the bank
77. While marshalling the balance sheet in the order of liquidity, asset comes last ?
(a) Debtors
(b) Cash
(c) Furniture
(d) Bank
78. Notebooks purchased by a stationery shop come under ………
(a) Assets
b) Income
c) Purchases
d) Liabilities
79. Ramesh, a dealer of Television, sold an old furniture to Rafeeque for { 3,000 on credit. Identify the day book to record this transaction.
a) Purchase day book
b) Journal proper
c) Sales day book
d) Cash book
80. Rent paid Rs 4,500 was entered in cash book as Rs 5,400. This is an error of
a) Principle
b) Omission
c) Compensating error
d) Commission
81. …………… account is prepared by a trader, who does not maintain the double entry system of accounting, to find out the value of credit purchase.
a) Total creditors
b) Total debtors
c) Bilis receivable
d) Bills payable
82. persons who owe to an enterprise an amount for buying goods and services on credit
Ans : Debtors
83. IGST means
Ans - Integrated Goods and Service Tax
84. credit balance as per pass book is
Ans - Favourable balance
85. Goodwill is classified as which one of the following assets.
a.Tangible b. Intangible c. Long-term d. Current
86. All credit purchases of goods are recorded in the –
Purchases book
87. ---------------- means a reality that has definite individual existence
Ans : entity
88. Debit note is a source document used for –
Ans : purchase return
89. Purchase of vehicle for cash should be debited to ----
Ans: vehicle account
90. Errors are committed due to wrong posting is called ----------
Ans: errors of commission
91. Provisions are created by
a) debiting the profit and loss account
b) crediting the profit and loss account
c) debiting the trading account
d) crediting the trading account
92. ------------- refers to remuneration paid to workers, directly engaged in factory for loading and production of goods.
Ans : wages
93. Expenses of an accounting remain unpaid at the end of an accounting period is called
Ans : outstanding expenses
94. Decrease in the value of fixed assets by constant use in business operations for earning revenue
a) wear and tear
b) depletion
c) amortisation
d) none of these
95. Purchased goods for cash is recorded in
(a) Purchases book (b) Purchases returns book (c) Cash book (d) Sales book
96. The statement prepared to ascertain the arithmetical accuracy of ledger accounts is
(a) Balance Sheet (b) Trial Balance (c) Accounting Equation (d) Statement of Affairs
97. Find the odd one :
(a) Sundry debtors (b) Bills receivables (c) Bank overdraft (d) Closing stock
98. The purpose of preparing a bank reconciliation statement is
(a) to know the bank balance as per cash book.
(b) to know the bank balance as per pass book.
(c) to identify the causes of difference between cash book and pass book balances.
(d) None of these
99. cash book is
a. journal b. ledger c. both journal and ledger d. none of these
100. Bank reconciliation statement is prepared by
a. Bank b. Account holder c. Tax authorities d. Government
