A)Creditors
B)Lenders
C)Customers
D)All the above.
2)‘For each and Every Debit there must be a corresponding Credit’ is the principal of____
A)Going Concern
B)Real Account.
C)Book-Keeping
D)Double Entry
3)The balance of the petty cash is
(A) An expense
(B) An income
(C) An asset
(D) A liability
4)Fixed Assets are
(A)Kept in the business for use over long time for earning income
(B)Meant for resale
(C)Meant for conversion
(D)All of the above
5)The term ‘Debtor’ means
A)A person who owes something to the business
B)A person to whom something is owing by the business
C)Both of the above.
D)None of the above.
6)A trial balance will not balance if
(A)Correct Journal entry is posted twice
(B)The purchase on credit basis is debited to purchases and credited to cash
(C)Rs.1,000 cash payment to creditors is debited to creditors for Rs.100 and credited to cash Rs.1,000.
(D)None of the above.
7)After the preparation of ledgers , the next step is preparation of
(A) Trading Account
(B) Trial Balance
(C) Profit and Loss account
(D) Balance Sheet 8)After preparing the trial balance the accountant finds that the total of debit side is short by Rs.3,000. The difference will be
(A)Credited to suspense account
(B)Debited to suspense account
(C)Adjusted to any of the debit balance account
(D)Adjusted to any of the credit balance. 19
9)Rs.20,000 paid as wages for erecting a machine should debited to
A)Repair account
B)Capital account
C)Machine account
D)Furniture account.
10) Sales of office furniture should be credited to
A)Sales account
B)Furniture Account
C)Purchases account
D)Cash account
11) Rent paid to landlord is credited to
A)Landlord’s a/c
B)Bad debts a/c
C)Cash a/c
D)None
12) Which of the following statements is true?
A)The term “ financial Statements includes both analysis and Interpretation”
B)On the basis of modus operandi, financial analysis can be classified as external analysis and internal analysis.
C)Vertical analysis refers to the comparison of financial data of a company for several years.
D)Horizontal analysis is also known as “static analysis”
13) Accounting provides information on
A)Cost and income for managers
B)Company’s tax liability for a particular year
C)Financial conditions of an institution
D)All of the above.
14) If the assets of a business are Rs.3,00,000 and its capital Rs.1,00,000, the liabilities of this business are
A)4,00,000
B)2,00,000
C)1,00,000
D)3,00,000
15) Effect of machinery purchased for cash
A)Decrease in total assets
B)Increase in total assets.
C)No change in the total assets.
D)Decrease in total liabilities.
16) Recording of outstanding salary is based on
A)Accrual concept
B)Going concern concept
C)Cost concept
D)Business entity concept 20
17) Goodwill Account is a
A)Nominal Account
B)Personal Account
C)Real Account
D)None
18)A withdrawal of goods from business by the proprietor should be credited to which Account.
A)Cash Account
B)Proprietor Account
C)Capital Account
D)Purchases Account
19) What checks the arithmetical accuracy of ledger accounts?
A)Ledger
B)Account
C)Trial Balance
D)Final Accounts.
20) The process of transferring debit and credit items from a journal to their respective Accounts in the ledger is termed as
A)Ledger Posting
B)Journalising
C)Balancing
D)Accounting.
21) Cash book is journal as well as
A)Cash Account
B)Ledger
C)Journal
D)Both cash and journal.
22) Financial position of a business is ascertained on the basis of:
A)Records prepared under book-keeping process.
B)Trial Balance
C)Accounting reports
D)None of the above
23)If the Assets of a business on 31St March 2020 are worth Rs.5,00,000 and its Capital Rs.3,50,000, its Liabilities on that date shall be
A)Rs.8,50,000
B)Rs.1,50,000
C)Rs.3,50,000
D)Rs.5,00,000
24) Classify the money spent of Rs.1,00,000 as travelling expenses of the Member Mechanical on trips abroad for purchase of capital asset is
(A)Capital expenditure
(B)Revenue expenditure
(C)Deferred Revenue Expenditure
(D)None of the above 21
25)If an individual asset is increased, there will be a corresponding
(A) Increase of another asset or increase of capital
(B) Decrease of another asset or increase of liability
(C) Decrease of specific liability or decrease of capital
(D) Increase in drawings and liability
26)Contingent Asset usually arises from unplanned or unexpected events that give rise to:
(A)The possibility of an inflow of economic benefits to the business entity
(B)The possibility of an outflow of economic benefits to the business entity
(C)Either a) or b)
(D)None of the above
27) Balance of indirect expenses accounts are transferred to
A)Trading Account
B)Profit & Loss account
C)Balance Sheet
D)Trial Balance.
29)A decrease in the provision for doubtful debts would result in:
(A) An increase in liabilities
(B) A decrease in working capital
(C) A decrease in net profits
(D) An increase in Net profits
30)The Debts written off as bad, if recovered subsequently are
A)Credited to Bad Debts recovered account
B)Credited to Debtors Account
C)Debited to Profit and Loss Account
D)None of the above
31) Provision for Bad and Doubtful Debts is treated in the balance sheet as
A)Added to Debtors
B)Deducted from Creditors
C)Added to Creditors
D)Deducted from Debtors
32) Identified and measured economic events should be recorded in
A)chronological order B)Alphabetical order
C)Both D)None .
33) A Suspense Account balance is
A)Debit
B)Credit
C)Debit or credit
D)None of them
34) When a debtor pays her dues
A)Assets side of Balance sheet will increase
B)Assets side of Balance Sheet will decrease
C)Liabilities side of Balance Sheet will increase
D)There will be no change in total assets or total liabilities
35) Claim admitted in respect of stock destroyed by fire will be credited to
A)Profit and Loss Account
B)Purchases Account
C)Loss Account due to fire
D)Balance sheet.
36) Patents, Copyrights and Trademarks are
A)Current assets
B)Fixed assets
C)Intangible assets
D)Investments.
37) Balance sheets are prepared
A)Daily
B)Weekly
C)Monthly
D)Annually.
38) Book-Keeping is mainly concerned with
A)recording of financial data.
B)Designing the systems of classifying and summarising the recorded data.
C)Interpreting the data for internal and external users.
D)All of the above.
39)Preparation of a Trial balance is for:
(A) Locating Errors
(B) Locating errors of principles
(C) The trial balance to agree.
(D) None of the above
40)Cash Book which is maintained to record small expenses is called.
(A) Simple Cash book
(B) petty cash book.
(C) Two column Cash Book.
(D) Triple Column Cash Book.
41)What is that maintained for known liabilities
(A)Provision
(B)Reserve
(C)Capital Reserve
(D)Reserve Fund
42)Closing, Rectification and Adjustment entries are made in which subsidiary Book.
(A)Cash Book
(B)Adjustment Book
(C)Journal Proper
(D)Ledger.
43)Journal Proper records
(A) All transactions
(B) All cash Transactions
(C) All transactions not recorded in any subsidiary books
(D) All credit Transactions
44)Real Account records
(A)Dealings with creditors or debtors
(B)Dealings in commodities
(C)Gains and losses
(D)All of the above.
45)The following is a statement showing the financial status of the company at any given time
(A)Trading account
(B)Profit and Loss statements
(C)Balance sheet
(D)Cash book.
46)Which of the following statements is correct?
(A) Goodwill is a fictitious asset
(B) Patents are tangible asset
(C) Debtors are current liability
(D) Land is a Current asset.
47)After sale of goods worth Rs.20,000 on March31,2020, a proprietor is left with closing stock of Rs. 10,000. This is
(A)An event
(B)A transaction
(C)A transaction as well as event
(D)neither a transaction or Event.
48)Assets are held in business for the purpose of
(A) Resale
(B) Conversion into cash
(C) Earning revenue
(D) None of them.
49)General Reserve is treated in Balance sheet as
(A) Asset
(B) Liability
(C) Outstanding Income
(D) Both as an Asset and a Liability.
50)Identified & Measured economic events should be recorded in
(A) Chronological order
(B) Alphabetical order
(C) Both
(D) None . 24
51)A Suspense Accounts shows this balance
(A) Debit
(B) Credit
(C) Debit or credit
(D) None of them
52)A Profit on the disposal of a fixed asset can also be described as an
(A) Over provision for depreciation on the asset
(B) Increase in Fixed Assets on the Balance Sheet
(C) Under provision for depreciation on the asset
(D) None of the above
53)Capital is the difference between
(A)Income and expenses
(B)Sales and cost of goods sold
(C)Assets and Liabilities
(D)None of the above
54)The following is not shown in the Balance Sheet
(A) Fixed deposit
(B) Opening stock
(C) Mortgage on land
(D) Bank overdraft.
55)Disagreement of a trial balance indicates the following error
(A) Error of Omission
(B) Error of Commission
(C) Duplicating error
(D) One sided Error.
56)Which of the following Statements is false
(A)Assets will be equal to capital, if there are no liabilities
(B)Basic Concepts bring uniformity in Accounting
(C)Income = Revenue- Expenses
(D)According to business entity concept the existence of business and proprietors is one and the same.
57) Which of the following Statements is false
(A)Assets will be equal to capital, if there are no liabilities
(B)Basic Concepts bring uniformity in Accounting
(C)Income = Revenue- Expenses
(D)According to business entity concept the existence of business and proprietors is one and the same.
Answer key Accounting process
1D
2D
3C
4A
5A
6C
7B
8B
9C
10B
11C
12A
13D
14B
15C
16A
17C
18D
19C
20A
21B
22C
23B
24A
25B
26A
27B
28D
29D
30A
31D
32A
33C
34D
35B
36C
37D
38A
39C
40B
41A
42C
43C
44B
45C
46A
47A
48C
49B
50A
51C
52A
53C
55B
56D
57D
