Introduction to Financial Accounting – Corporate and Management Accounting MCQ

Going through the Introduction to Financial Accounting – Corporate and Management Accounting CS Executive MCQ Questions with Answers you can quickly revise the concepts.

Introduction to Financial Accounting – Corporate and Management Accounting MCQs

Question 1.
………. is used by business entities for keeping records of their monetary or financial transactions.
(A) Accounting
(B) Cost accounting
(C) Costing
(D) Budgetary Control
Answer:
(A) Accounting

Question 2.
Accounting is “the art of recording, classifying and summarizing in a significant manner and in terms of money, transactions and events which are, in part at least, of a financial character and interpreting the results thereof”. This definition is given by -…………..
(A) Institute of Chartered Accountant of India (ICAI)
(B) Institute of Chartered Accountant of England
(C) American Institute of Certified Public Accountants
(D) Institute of Chartered Accountant of Pakistan
Answer:
(C) American Institute of Certified Public Accountants

Question 3.
Which of the following is attribute of accounting
(A) Accounting is social science.
(B) It involves recording, classifying and summarizing.
(C) It records transaction of qualitative nature
(D) All of the above
Answer:
(B) It involves recording, classifying and summarizing.

Question 4.
…… is the language of business and used to communicate financial and other information to different interested parties like creditors, investors, researchers, governments etc.
(A) Accounting
(B) Cost Accounting
(C) Costing
(D) Management Accounting
Answer:
(A) Accounting

Question 5.
Accounting is -…..
1. An art
2. A science
Select the correct answer from the options given below –
(A) 1 only
(B) 2 only
(C) Partly 1 and Partly 2
(D) 2 but not 1
Answer:
(C) Partly 1 and Partly 2

Question 6.
Which of these is not a function of Financial Accounting
(A) To provide financial information to the users of the financial statements.
(B) To portray gloomy picture of the business in order to evade tax liabilities.
(C) To keep a systematic record of business transactions.
(D) To depict a true and fair view of the financial position of the business.
Answer:
(B) To portray gloomy picture of the business in order to evade tax liabilities.

Question 7.
Accounting involves -…………
(I) Recording
(II) Classifying
(III) Summarizing
Select the correct answer from options given below –
(A) (I)
(B) (I) & (III)
(C) (I)&(II)
(D) All of the above are correct
Answer:
(D) All of the above are correct

Question 8.
Systematically writing down the transactions and events in account books soon after their occurrence is known as -………..
(A) Classifying
(B) Recording
(C) Summarizing
(D) Numbering
Answer:
(B) Recording

Question 9.
The process of grouping transactions or entries of the same type at one place is known as -………
(A) Classifying
(B) Recording
(C) Summarizing
(D) Numbering
Answer:
(A) Classifying

Question 10.
Which of the following involves the preparation of reports and statements from the classified data (ledger) understandable and useful to management and other interested parties
(A) Classifying
(B) Recording
(C) Summarizing
(D) All of the above
Answer:
(C) Summarizing

Question 11.
Accounting records only those transactions and events which are of -………..
X. Social character
Y. Financial character
Select the correct answer from the options given below –
(A) X only
(B) Y only
(C) Both X & Y
(D) None of above
Answer:
(B) Y only

Question 12.
The statements prepared by the summarizing process is known as ……….. which will show the profit or loss made by the business over a period of time and the total capital employed in the business.
(A) Financial statements
(B) Budgeted statements
(C) Standard cost statements
(D) All of the above
Answer:
(A) Financial statements

Question 13.
Which of the following is/are the branch of accounting
(P) Financial Accounting
(Q) Cost Accounting
(R) Management Accounting Select the correct answer –
(A) (P)
(B) (Q)
(C) (R)
(D) All of the above
Answer:
(D) All of the above

Question 14.
Which of the following is/are not the branch of accounting
(A) Cost Accounting
(B) Financial Accounting
(C) Human Resources Accounting
(D) All of the above
Answer:
(C) Human Resources Accounting

Question 15.
Which of the following is the branch of accounting
(I) Human Resources Accounting
(II) Social Accounting
(III) Security Accounting The correct answer is –
(A) (i) & (ii)
(B) (ii) & (iii)
(C) (i) & (iii)
(D) None of the above
Answer:
(D) None of the above

Question 16.
Which of the following is/are the main functions of accounting
(A) Keeping systematic records
(B) Protecting and controlling business properties
(C) Ascertaining the operational profit/ loss
(D) All of the above
Answer:
(D) All of the above

Question 17.
Which of the following is /are the main functions of accounting
1. Allowing credit to customers
2. Ascertaining the operational profit or loss
3. Providing leadership to accounting staff
Select the correct answer from options given below-
(A) 1 & 3
(B) 2 only
(C) 1,2 & 3
(D) None of the above
Answer:
(B) 2 only

Question 18.
Which of the following is/are the advantages of accounting
(i) Maintenance of legal recor4s
(ii) Preparation of financial statements
(iii) Comparison of results The correct answer is……
(A) (i) only
(B) (i)&(ii)
(C) (ii) only
(D) (ii) & (iii)
Answer:
(D) (ii) & (iii)

Question 19.
Which of the following is/are the advantages of accounting
(A) Decision making relating to financial aspect
(B) Evidence in legal matters relating to accounting
(C) Provides information to interested parties
(D) All of the above
Answer:
(D) All of the above

Question 20.
Which of the following is/are NOT the advantages of accounting
(A) Helps in taxation matters
(B) Valuation of business
(C) Accounting information is based on estimates.
(D) All of the above
Answer:
(C) Accounting information is based on estimates.

Question 21.
Which of the following is/are NOT the advantages of accounting
(A) Protecting and controlling strategic policy formulation
(B) Preparation of financial statements
(C) Comparison of results
(D) All of the above
Answer:
(A) Protecting and controlling strategic policy formulation

Question 22.
Which of the following is/are the limitations of accounting
(A) Accounting information is expressed in terms of money
(B) Accounting information is based on estimates.
(C) Accounting information may be biased.
(D) All of the above
Answer:
(D) All of the above

Question 23.
Which of the following is/are the limitations of accounting
(A) Accounting can be manipulated
(B) Money as a measurement unit changes in value
(C) Accounting information is based on estimates.
(D) All of the above
Answer:
(D) All of the above

Question 24.
Which of the following is/are not the limitations of accounting
(A) Provides information to interested parties
(B) Accounting information is expressed in terms of money
(C) Accounting information is based on estimates.
(D) All of the above
Answer:
(A) Provides information to interested parties

Question 25.
……. is mainly concerned with recording of financial data relating to the business operations in a significant and orderly manner.
(A) Accounting
(B) Book-keeping
(C) Posting
(D) Journalizing
Answer:
(A) Accounting

Question 26.
…….. covers procedural aspects of accounting work and includes record keeping function.
(A) Accounting
(B) Book-keeping
(C) Posting
(D) Journalizing
Answer:
(B) Book-keeping

Question 27.
Book-keeping is concerned with the ……….of transactions while Accounting is concerned with the ……. of the recorded transactions.
(A) Recording, summarizing
(B) Summarizing, Recording
(C) Posting, Recording
(D) Summarizing, Posting
Answer:
(A) Recording, summarizing

Question 28.
Which among the following constitutes the base for accounting
(A) Book-keeping
(B) Posting
(C) Analyzing
(D) None of above
Answer:
(A) Book-keeping

Question 29.
Financial statement do not form part of bookkeeping.
(A) True
(B) False
(C) Partly true
(D) None of above
Answer:
(A) True

Question 30.
Financial position of the business is ascertained on the basis of -…….
A. Book-keeping
B. Accounting reports The correct answer is -……
(A) Both A and B
(B) B only
(C) Either A or B
(D) A only
Answer:
(B) B only

Question 31.
…….. is a system in which accounting entries are made only when cash is received or paid.
(A) Accrual system of accounting
(B) Cash system of accounting
(C) Hybrid system of accounting
(D) Mercantile system of accounting
Answer:
(B) Cash system of accounting

Question 32.
………… is a system in which transactions are recorded on the basis of amounts having become due for payment or receipt.
(A) Accrual system of accounting
(B) Cash system of accounting
(C) Hybrid system of accounting
(D) None of the above
Answer:
(A) Accrual system of accounting

Question 33.
Which of the following has no relevance whether the receipts pertain to previous period or future period
(A) Accrual system of accounting
(B) Cash system of accounting
(C) Hybrid system of accounting
(D) None of the above
Answer:
(B) Cash system of accounting

Question 34.
………… is incompatible with the matching principle of income determination.
(A) Accrual system of accounting
(B) Cash basis of accounting
(C) Hybrid system of accounting
(D) None of the above
Answer:
(B) Cash basis of accounting

Question 35.
………… attempt to record the financial effects of the transactions, events, and circumstances of an enterprise in the period in which they occur rather than recording them in period(s) in which cash is received or paid by the enterprise.
(A) Accrual system of accounting
(B) Cash basis of accounting
(C) Hybrid system of accounting
(D) None of the above
Answer:
(A) Accrual system of accounting

Question 36.
Cash system of accounting is suitable in which of the following cases
(A) Where the organization is very small or in the case of individuals
(B) Where credit transactions are almost negligible and collections are uncertain
(C) Both (A) & (B)
(D) Neither (A) nor (B)
Answer:
(C) Both (A) & (B)

Question 37.
Doctors, lawyers, firms of chartered accountants/Company Secretaries generally follows of accounting
(A) Accrual system of accounting
(B) Cash basis of accounting
(C) Hybrid system of accounting
(D) None of the above
Answer:
(B) Cash basis of accounting

Question 38.
Which of the following is/are the essential features of accrual basis of accounting
(A) Revenue is recognized when cash is received
(B) Costs are matched against revenues on the basis of relevant time period to determine periodic income.
(C) Costs which are not charged to in-come are carried forward and are kept under continuous review.
(D) Both (B) & (C)
Answer:
(D) Both (B) & (C)

Question 39.
Which of the following is/are the essential features of accrual basis of accounting
(I) Revenue is recognized only when cash is received.
(II) Costs are matched against revenues on the basis of relevant time period to determine periodic income.
(III) Costs which are not charged to income are carried forward and are kept under continuous review.
(IV) Receipts or incomes are recorded as and when cash is received or becomes due on the other hand payments are recorded only when cash is actually paid.
The correct answer is –
(A) (I) & (IV) only
(B) (I), (III) & (IV) only
(C) (III) & (IV) only
(D) (II) & (III) only
Answer:
(D) (II) & (III) only

Question 40.
Accounting is of primary importance to the -……..
(A) Proprietors and the managers
(B) Creditors and workers
(C) Debtors & government
(D) Bankers & creditors
Answer:
(A) Proprietors and the managers

Question 41.
Which of the following is/are external users of accounting information’s
(A) Shareholders/investors
(B) Creditors
(C) Government agencies
(D) All of the above
Answer:
(D) All of the above

Question 42.
Which of the following would be considered as external users of accounting information’s
(A) Board of Directors
(B) Shareholders
(C) Finance manager
(D) Sales manager
Answer:
(B) Shareholders

Question 43.
Select the odd one in relation to users of accounting information’s.
(A) Officers
(B) Managers
(C) Debtors
(D) Board of directors
Answer:
(C) Debtors

Question 44.
Regulatory Agencies interested as users of accounting information’s includes……………
(A) Various Government departments
(B) Agencies such as National Company Law Tribunal (NCLT)
(C) Registrar of Companies (RoC)
(D) All of the above
Answer:
(D) All of the above

Question 45.
Which of the following is characteristic of accounting information
P. Relevance
Q. Reliability
R. Comparability
Select the correct answer from the options given below –
(A) P
(B) Q
(C) R
(D) All of the above
Answer:
(D) All of the above

Question 46.
Which of the following is not characteristic of accounting information
(A) Understandability
(B) Relevance
(C) Future transactions
(D) Completeness
Answer:
(C) Future transactions

Question 47.
Which of the following is/are can be treated as role of accountant
(A) Personnel management
(B) Innovations & environmental scanning
(C) Advisory role in taxation
(D) All of the above
Answer:
(C) Advisory role in taxation

Question 48.
Which of the following is/are cannot be treated as role of accountant
(A) Strategy formulation
(B) Internal Audit
(C) Statutory Audit
(D) Maintenance of Books of Account
Answer:
(A) Strategy formulation

Question 49.
Which of the following is/are can be treated as role of accountant
(A) Maintenance of Books of Account
(B) Taxation services
(C) Investigation of accountants
(D) All of the above
Answer:
(D) All of the above

Question 50.
………… refer to the specific accounting principles and the methods of applying those principles adopted by the enterprise in the preparation and presentation of financial statements.
(A) Accounting methods
(B) Accounting policies
(C) Accounting concepts
(D) Accounting assumptions
Answer:
(B) Accounting policies

Question 51.
Accounting policies followed by organizations -………….
(A) Can be changed every year.
(B) Should be consistently followed from year to year
(C) Can be changed after 5 years
(D) None of the above
Answer:
(B) Should be consistently followed from year to year

Question 52.
When a change in accounting policy is justified……….
(A) To comply with accounting standard
(B) To ensure more appropriate presentation of the financial statement of the enterprise
(C) To comply with law
(D) All of the above
Answer:
(D) All of the above

Question 53.
It is essential to standardize the accounting principles and policies in order to ensure -……
(A) Transparency
(B) Profitability
(C) Reputation
(D) All of the above
Answer:
(A) Transparency

Question 54.
A specific accounting policy refers to -…………
(A) Principles
(B) Methods of applying those principals
(C) Both (A) & (B)
(D) None of the above
Answer:
(C) Both (A) & (B)

Question 55.
The determination of the amount of bad debts is an accounting -………
(A) Policy
(B) Estimate
(C) Parameter
(D) None of the above
Answer:
(B) Estimate

Question 56.
Generally, which of the following measurement bases are usually accepted in accounting parlance
(A) Historical Cost
(B) Current Cost
(C) Realizable Value
(D) Any of the above
Answer:
(D) Any of the above

Question 57.
Book value & Market value of machinery on 31.3.2015 was ₹ 1,00,000 & ₹ 1,10,000 respectively. As on 31.3.2019, if the company values the machinery at ₹ 1,10,000, which of the following valuation principle is being followed –
(A) Historical Cost
(B) Present Value
(C) Realisable Value
(D) Current Cost
On the basis of following information answer next 4 questions.
Mohan purchased a machinery amounting ₹ 10,000 on 1.4.2010.
On 31.3.2019, similar machinery could be purchased for ₹ 20,000 but the realizable value of the machinery (purchased on 1.4.2010) was estimated at ₹ 15,000. The present discounted value of the future net cash inflows that the machinery was expected to generate in the normal course of business, was calculated as ₹ 12,000.
Answer:
(C) Realisable Value

Question 58.
The current cost of the machinery is -…………..
(A) ₹ 10,000
(B) ₹ 20,000
(C) ₹ 15,000
(D) ₹ 12,000
Answer:
(B) ₹ 20,000

Question 59.
The present value of machinery is -……..
(A) ₹ 10,000
(B) ₹ 20,000
(C) ₹ 15,000
(D) ₹ 12,000
Answer:
(D) ₹ 12,000

Question 60.
The historical cost of machinery is -……
(A) ₹ 10,000
(B) ₹ 20,000
(C) ₹ 15,000
(D) ₹ 12,000
Answer:
(A) ₹ 10,000

Question 61.
The realizable value of machinery is -………
(A) ₹ 10,000
(B) ₹ 20,000
(C) ₹ 15,000
(D) 112,000
Answer:
(C) ₹ 15,000

Question 62.
Property, plant and equipment are conventionally presented in the balance sheet at -……….
(A) Replacement cost less accumulated depreciation
(B) Historical cost less salvage value
(C) Historical cost less depreciation portion there of
(D) Original cost adjusted for general price-level changes
Answer:
(C) Historical cost less depreciation portion there of

Question 63.
All accounts are classified into – …………
(A) Personal
(B) Real
(C) Nominal accounts
(D) Any of the above
Answer:
(D) Any of the above

Question 64.
Accounts recording transactions with a person or group of persons are known -………
(A) Personal accounts
(B) Real accounts
(C) Nominal accounts
(D) impersonal accounts
Answer:
(A) Personal accounts

Question 65.
Personal accounts are of the following types……..
(A) Natural, Real, Representative
(B) Artificial, Legal, Nominal
(C) Natural, Artificial, Representative
(D) Any of the above
Answer:
(C) Natural, Artificial, Representative

Question 66.
An account recording transactions with an individual human being is termed as a -….
(A) Artificial or legal persons account
(B) Natural persons’ personal account
(C) Representative personal accounts
(D) Any of the above
Answer:
(B) Natural persons’ personal account

Question 67.
Accounts relating to properties or assets are known as -…..
(A) Real Accounts
(B) Personal Accounts
(C) Nominal Accounts
(D) None of above
Answer:
(A) Real Accounts

Question 68.
An account recording financial transactions with an artificial person created by law or otherwise are termed as -……….
(A) Artificial or legal persons account
(B) Natural persons’ personal account
(C) Representative personal accounts
(D) Any of the above
Answer:
(A) Artificial or legal persons account

Question 69.
Real accounts can be further classified into -………….
(A) Tangible
(B) Intangible
(C) (A) or (B)
(D) None of above
Answer:
(C) (A) or (B)

Question 70.
Accounts which represent a certain person or group of persons are termed as -…….
(A) Artificial or legal persons account
(B) Natural persons personal account
(C) Representative personal accounts
(D) Any of the above
Answer:
(C) Representative personal accounts

Question 71.
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
Select the correct answer from the options given below –
(A) Only (ii) above
(B) Only (iv) above
(C) Both (i) and (iii) above
(D) Both (ii) and (iii) above
Answer:
(C) Both (i) and (iii) above

Question 72.
Which of the following types of accounts represent assets and properties which can be seen, touched, felt, measured, purchased and sold………..
(A) Tangible real accounts
(B) Intangible real accounts
(C) Representative personal accounts
(D) Artificial or legal persons account
Answer:
(A) Tangible real accounts

Question 73.
Accounts relating to income, revenue, gain expenses and losses are termed as:……..
(A) Real Accounts
(B) Personal Accounts
(C) Nominal Accounts
(D) None of above
Answer:
(C) Nominal Accounts

Question 74.
………. accounts represent assets and ……… properties which cannot be seen, touched or felt but they can be measured in terms of money.
(A) Tangible real accounts
(B) Intangible real accounts
(C) Representative personal accounts
(D) Artificial or legal persons account
Answer:
(B) Intangible real accounts

Question 75.
The rule for nominal accounts is -…….
(A) Debit the receiver. Credit the giver
(B) Debit what comes in, Credit what goes out
(C) Debit all expenses and losses, Credit all incomes and gains
(D) All of the above
Answer:
(C) Debit all expenses and losses, Credit all incomes and gains

Question 76.
The rule for personal accounts is -……..
(A) Debit the receiver. Credit the giver
(B) Debit what comes in, Credit what goes out
(C) Debit all expenses and losses, Credit all incomes and gains
(D) All of the above
Answer:
(A) Debit the receiver. Credit the giver

Question 77.
The rule for real accounts is -……..
(A) Debit the receiver, Credit the giver
(B) Debit what comes in, Credit what goes out
(C) Debit all expenses and losses, Credit all incomes and gains
(D) All of the above
Answer:
(B) Debit what comes in, Credit what goes out

Question 78.
Goodwill accounts, patents account, trademarks account, copyrights account are examples of –
(A) Tangible real accounts
(B) Intangible real accounts
(C) Representative personal accounts
(D) Artificial or legal persons account
Answer:
(B) Intangible real accounts

Question 79.
Provision for doubtful debts account, stock reserve account etc. are -…..
(A) Valuation (Personal) accounts
(B) Artificial or legal persons personal account
(C) Tangible real accounts
(D) Nominal Accounts
Answer:
(A) Valuation (Personal) accounts

Question 80.
Trading account is a -……
(A) Personal account
(B) Real account
(C) Nominal account
(D) Valuation account
Answer:
(C) Nominal account

Question 81.
Outstanding wages is a -…….
(A) Real Accounts
(B) Personal Accounts
(C) Nominal Accounts
(D) None of above
Answer:
(B) Personal Accounts

Question 82.
Which of the following account is tangible real account……..
(A) Patent
(B) Goodwill
(C) Machinery
(D) Creditors
Answer:
(C) Machinery

Question 83.
Which of the following account is the odd one out
(A) Office furniture & equipment
(B) Freehold land & buildings
(C) Stock of materials
(D) Plant & machinery
Answer:
(C) Stock of materials

Question 84.
At the end of the accounting year all the nominal accounts of the ledger book are -……
(A) Balanced but not transferred to profit and loss account
(B) Not balanced and also the balance is not transferred to the profit and loss account
(C) Balanced and the balance is transferred to the balance sheet
(D) Not balanced and their balance is transferred to the profit and loss account.
Answer:
(D) Not balanced and their balance is transferred to the profit and loss account.

Question 85.
Which of the following are current assets of a business
(i) Income received in advance
(ii) Stock
(iii) Debtors
(iv) Pre-paid expenses
(v) Accrued income
Select the correct answer from the options given below
(A) Both (i) and (iv) above
(B) Both (ii) and (iii) above
(C) (i), (ii) and (iii) above
(D) (ii), (iii), (iv) and (v) above
Answer:
(D) (ii), (iii), (iv) and (v) above

Question 86.
There are …………. systems of keeping records.
(A) Single Entry System & Double Accounts System
(B) Single Account System & Double Accounts System
(C) Single entry system & Double entry system
(D) Single Entry System & Duplicate account system
Answer:
(C) Single entry system & Double entry system

Question 87.
Which system of accounts recognizes the fact that every transaction has two aspects and records both aspects of each and every transaction
(A) Single entry system
(B) Double entry system
(C) Double account system
(D) Duplicate account system
Answer:
(B) Double entry system

Question 88.
In double entry system of book-keeping every business transaction affects:
(A) Two accounts with equal but opposite effect.
(B) Two sides of the same account.
(C) The same account on two different dates.
(D) All of the above
Answer:
(A) Two accounts with equal but opposite effect.

Question 89.
As per the provisions of the Companies Act, 2013, companies must maintain their accounts under –
(A) Double account system
(B) Single entry system
(C) Double entry system
(D) Duplicate account system
Answer:
(C) Double entry system

Question 90.
Which of the following is/are merit of double entry system
(A) It keeps a complete record of business transactions.
(B) It provides a check on the arithmetical accuracy of accounts
(C) The detailed profit and loss account can be prepared to show profits earned or loss suffered during any given period.
(D) All of the above
Answer:
(D) All of the above

Question 91.
Which of the following accounting equation is correct
(A) Assets + Capital = Liabilities
(B) Assets + Liabilities = Capital
(C) Assets + Liabilities + Capital = Nil
(D) None of the above
Answer:
(D) None of the above

Question 92.
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 of drawings and liability
Answer:
(B) Decrease of another asset or increase of liability

Question 93.
Which of the following equation is correct
(A) Capital + Liabilities = Fixed Assets + Current Assets
(B) Capital + Liabilities – Current Assets = Fixed Assets
(C) Assets = Liabilities + Capital
(D) All of the above
Answer:
(D) All of the above

Question 94.
Which of the financial statement represents the accounting equation
(A) Manufacturing account
(B) Cash flow statement
(C) Balance sheet
(D) Profit and loss account
Answer:
(C) Balance sheet

Question 95.
Difference between assets and outsiders liability is -…………..
(A) Creditors
(B) Capital
(C) Drawings
(D) Bills payable
Answer:
(B) Capital

Question 96.
A businessman purchased goods for ₹ 25,00,000 and sold 80% of such goods during the accounting year ended 31st March, 2019. The market value of the remaining goods was ₹ 4,00,000. He valued the closing stock at cost. He violated the concept of -………
(A) Periodicity
(B) Conservatism
(C) Money measurement
(D) Cost
Answer:
(B) Conservatism

Question 97.
According to which concept, the owner of an enterprise pays the ‘interest on drawings’
(A) Conservatism concept
(B) Dual aspect concept
(C) Entity concept
(D) Accrued concept
Answer:
(A) Conservatism concept

Question 98.
Mr. Ashok buys clothing of ₹ 50,000 paying cash ₹ 20,000. What is the amount of expense as per the accrued concept ……………
(A) ₹ 30,000
(B) ₹ 20,000
(C) ₹ 50,000
(D) Nil
Answer:
(C) ₹ 50,000

Question 99.
Capital = ₹ 1,00,000, Outsiders liability = ₹ 2,50,000, Toted assets = ?
(A) 3,50,000
(B) 1,50,000
(C) 2,00,000
(D) 1,75,000
Answer:
(A) 3,50,000

Question 100.
Fixed assets = ₹ 5,50,000, Current assets = ₹ 2,25,000, Current liabilities = ₹ 1,50,000, Bank Loan = ₹ 1,75,000. Capital =?
(A) 3,50,000
(B) 5,50,000
(C) 4,50,000
(D) 6,50,000
Answer:
(C) 4,50,000

Question 101.
Current Assets – Current liabilities =?
(A) Working capital
(B) Capital
(C) Debtors
(D) Owners equity
Answer:
(A) Working capital

Question 102.
On 1.1.2019, CS N. S. Zad paid rent of ₹ 25,000 for Zads Professional Academy. This can be classified as –
(A) An event
(B) A transaction
(C) A transaction as well as an event
(D) Neither a transaction nor an event
Answer:
(A) An event

Question 103.
Mr. Bhandari purchased a car for ₹ 50,000, making a down payment of ₹10,000 and signing a ₹ 40,000 bill payable due in 60 days. Asa result of this transaction
(A) Total assets increased by ₹ 50,000
(B) Total liabilities increased by ₹ 40,000
(C) Total assets increased by ₹ 40,000
(D) Toted assets increased by ₹40,000with corresponding increase in liabilities by ₹ 40,000
Answer:
(D) Toted assets increased by ₹40,000with corresponding increase in liabilities by ₹ 40,000

Question 104.
Accounting policy for inventories of X Ltd. states that inventories are valued at the lower of cost or net realizable value. Which accounting principle in followed in adopting the above policy
(A) Materiality
(B) Prudence
(C) Substance over form
(D) All of the above
Answer:
(B) Prudence

Question 105.
On 31.3.2019 after sale of goods ₹2,000, Neelam is left with the closing inventory of ₹ 10,000. This is -…….
(A) An event
(B) A transaction
(C) A transaction as well as an event
(D) Neither a transaction nor an event
Answer:
(A) An event

Question 106.
Provisions for doubtful debts, provision for discount on debtors are based on -………
(A) Prudence
(B) Substance over from
(C) Materiality
(D) All of the above
Answer:
(A) Prudence

Question 107.
Purposes of an accounting system include all the following except -……
(A) Interpret and record the effects of business transaction
(B) Classify the effects of transactions to facilitate the preparation of reports
(C) Summarize and communicate information to decision makers
(D) Dictate the specific types of business enterprise transactions that the enterprises may engage in.
Answer:
(D) Dictate the specific types of business enterprise transactions that the enterprises may engage in.

Question 108.
Accounting cycle or accounting process includes -……..
(X) Journalizing (Summarizing)
(Y) Posting to ledger (Recording)
(Z) Final account (Classifying)
Find the correct match.
(A) (X)
(B) (Y)
(C) All (X), (Y) & (Z)
(D) None of the above
Answer:
(D) None of the above

Question 109.
…… includes identifying, recording, classifying and summarizing the transactions.
(A) Accounting posting
(B) Accounting cycle
(C) Tally of accounts
(D) All of the above
Answer:
(B) Accounting cycle

Question 110.
In which order the accounting transactions and events are recorded in the books
(A) Journal, Subsidiary books. Ledger and Trial Balance
(B) Ledger, Journal, Ledger, and Trial Balance.
(C) Subsidiary books, Ledger and Trial Balance and Journal.
(D) Profit and loss account, Ledger, Balance sheet, Journal.
Answer:
(A) Journal, Subsidiary books. Ledger and Trial Balance

Question 111.
Journal is the book of in which every transaction is recorded before being posted into the ledger.
(A) Primary entry
(B) Secondary entry
(C) Third entry
(D) None of above
Answer:
(A) Primary entry

Question 112.
………. is a book in which all the business transactions are originally recorded in chronological order and from which they are posted to the ledger accounts at any convenient time.
(A) Ledger
(B) Journal
(C) Purchases returns books
(D) Sales book
Answer:
(B) Journal

Question 113.
Journal has columns.
(A) 4
(B) 5
(C) 3
(D) 6
Answer:
(B) 5

Question 114.
Transactions which are inter-connected and have taken place simultaneously are recorded by means of a -……….
(A) Adjustment entry
(B) Combined journal entry
(C) Either (A) or (B)
(D) Closing entry
Answer:
(B) Combined journal entry

Question 115.
……….. is the principal books of account where similar transactions relating to a particular person or property or revenue or expense are recorded.
(A) Ledger
(B) Journal
(C) Purchases returns books
(D) Sales book
Answer:
(A) Ledger

Question 116.
Ledger is the of accounts where …….. similar transactions relating to a particular person or property or revenue or expense are recorded.
(A) Principal book
(B) Primary entry book
(C) Third entry book
(D) None of above
Answer:
(A) Principal book

Question 117.
………is a books of account; in which all types of accounts relating to assets, liabilities, capital, expenses and revenues are maintained.
(A) Ledger
(B) Journal
(C) Primary entry book
(D) None of above
Answer:
(B) Journal

Question 118.
The process of recording transaction in journal is termed as -………
(A) Balancing
(B) Posting
(C) Journalizing
(D) None of above
Answer:
(C) Journalizing

Question 119.
Process of recording transaction is ledger is known as -………
(A) Balancing
(B) Posting
(C) Journalizing
(D) None of above
Answer:
(B) Posting

Question 120.
Journal is book of -………
(A) Analytical record
(B) Chronological record
(C) Alphabetical record
(D) None of above
Answer:
(B) Chronological record

Question 121.
Ledger is book for – ……….
(A) Analytical record
(B) Chronological record
(C) Alphabetical record
(D) None of above
Answer:
(A) Analytical record

Question 122.
The process of equalizing the two sides of an account by putting the difference on the side where amount is short is known as -…..
(A) Balancing
(B) Posting
(C) Journalizing
(D) None of above
Answer:
(A) Balancing

Question 123.
Journal and ledger records transactions in -………
(A) A chronological order and analytical order respectively.
(B) An analytical order and chronological order respectively.
(C) A chronological order only
(D) An analytical order only.
Answer:
(A) A chronological order and analytical order respectively.

Question 124.
Ledger book is popularly known as -………
(A) Secondary books of account
(B) Principal books of account
(C) Subsidiary books of account
(D) None of the above
Answer:
(B) Principal books of account

Question 125.
At the end of the accounting year all the nominal accounts of the ledger book are -……….
(A) Balanced but not transferred to profit and loss account
(B) Not balanced and also the balance is not transferred to the profit and loss account
(C) Balanced and the balance is transferred to the balance sheet
(D) Not balanced and their balance is transferred to the profit and loss account.
Answer:
(D) Not balanced and their balance is transferred to the profit and loss account.

Question 126.
The sub-division of journal into various subsidiary journals in which transactions of similar nature are recorded are called -………
(A) Subsidiary books.
(B) Ledger
(C) Journal
(D) Analytical record
Answer:
(A) Subsidiary books.

Question 127.
Which of the following is/are the subsidiary books
(A) Primary Books
(B) Bills Payable Book
(C) Purchases Book
(D) (B) & (C)
Answer:
(D) (B) & (C)

Question 128.
Which of the following is/are not subsidiary books
(A) Purchases Returns Book
(B) Cash Book
(C) Journal proper
(D) All of the above
Answer:
(D) All of the above

Question 129.
Purchases book is meant for recording the ……… of goods
(A) Credit purchase
(B) Cash purchase
(C) Budgeted purchases
(D) Both (A) and (B)
Answer:
(A) Credit purchase

Question 130.
Cash purchases are recorded in -………
(A) Purchases Book
(B) Cash Book
(C) Purchases Returns Book
(D) Partly in Cash Book and partly in Journal Proper
Answer:
(B) Cash Book

Question 131.
Purchases day book records -………
(A) All cash purchases
(B) All credit purchases
(C) Credit purchases of trading goods
(D) All of the above
Answer:
(C) Credit purchases of trading goods

Question 132.
The total of the purchases day book is posted periodically to the debit of -………
(A) Purchases account
(B) Cashbook
(C) Journal proper
(D) None of these
Answer:
(A) Purchases account

Question 133.
In the Stiles Book of goods are ……… recorded.
(A) Cash sale
(B) Credit sale
(C) Budgeted sales
(D) All of the above
Answer:
(B) Credit sale

Question 134.
Cash sales are recorded in -………
(A) Journal proper
(B) Sales Book
(C) Cash Book
(D) All of the above
Answer:
(C) Cash Book

Question 135.
Credit sale of various assets or investments will be recorded in -………
(A) General Journal
(B) Sales Book
(C) Cash Book
(D) Purchase book
Answer:
(A) General Journal

Question 136.
…… records the details of goods returned by the business organization to the supplier(s).
(A) Sales Returns Book
(B) Purchase returns books
(C) Journal proper
(D) All of the above
Answer:
(B) Purchase returns books

Question 137.
When the goods are returned to the ……. supplier, a is sent to him.
(A) Credit note
(B) Debit note
(C) Thank you note
(D) All of the above
Answer:
(B) Debit note

Question 138.
The total amount column of the sales return book is -………
(A) Credited to purchases returns account
(B) Debited to sales return account
(C) Credited to sales return account
(D) Debited to purchases returns account
Answer:
(B) Debited to sales return account

Question 139.
The total amount column of the purchases return book is -………
(A) Credited to purchases returns account
(B) Debited to sales return account
(C) Credited to sales return account
(D) Debited to purchases returns account
Answer:
(A) Credited to purchases returns account

Question 140.
Goods Outward Journal is meant for recording all returns of goods
(A) Purchased on credit
(B) Purchased on cash
(C) Sold on credit
(D) Sold on cash
Answer:
(A) Purchased on credit

Question 141.
The details of goods returned by the customers to the business organization are recorded in ………. book.
(A) Sales Returns Book
(B) Purchase returns books
(C) Journal proper
(D) All of the above
Answer:
(A) Sales Returns Book

Question 142.
……… is used to record the details of bills receivable by the business organization.
(A) Purchases Book
(B) Bills Payable Book
(C) Bills Receivable Book
(D) None of the above
Answer:
(C) Bills Receivable Book

Question 143.
……… is used to record the particulars of all the bills payable accepted by the business organization for the purpose of paying amounts due to its creditors.
(A) Journal proper
(B) Bills Payable Book
(C) Bills Receivable Book
(D) Sales Book
Answer:
(B) Bills Payable Book

Question 144.
The total of the amount of the bills receivable book is posted to the ……… in the ledger.
(A) Dr. of bills payable account
(B) Cr. of bills payable account
(C) Dr. of bills receivable account
(D) Dr. of bills receivable account
Answer:
(C) Dr. of bills receivable account

Question 145.
The total of the amount of the bills payable book is posted to the ……… in the ledger.
(A) Dr. of bills payable account
(B) Cr. of bills payable account
(C) Dr. of bills receivable account
(D) Dr. of bills receivable account
Answer:
(B) Cr. of bills payable account

Question 146.
When fixed assets or stationeries are purchased on credit, the entries are passed in the………
(A) General journal
(B) Purchase day book
(C) Purchase Account
(D) Any of the above
Answer:
(A) General journal

Question 147.
Which of the following books is used to record purchase of machinery by cash.
(A) Cash book
(B) Purchases book
(C) Journal proper
(D) Purchases returns book
Answer:
(A) Cash book

Question 148.
When obsolete assets are sold on credit, these are originally recorded in the -……….
(A) Sales day book
(B) Sale Account
(C) General journal
(D) Any of the above
Answer:
(C) General journal

Question 149.
……… is the book in which all transactions concerning cash receipts and cash payments are recorded.
(A) Journal proper
(B) Cash book
(C) Sales Book
(D) Purchases Book
Answer:
(B) Cash book

Question 150.
Cash Book is in the form of -………
(A) Journal
(B) An account
(C) Statement
(D) All of the above
Answer:
(B) An account

Question 151.
Balance of cash column in cash book has -………
(A) Dr. balance
(B) Cr. Balance
(C) Dr. or Cr. Balance
(D) None of the above
Answer:
(A) Dr. balance

Question 152.
Which of the following is/are features of cash book
(A) It performs the functions of both journal and ledger at the same time.
(B) Cash receipts are recorded in the credit side and cash payments are recorded in the debit side.
(C) It records two aspect of transaction ie. cash & credit.
(D) All of the above
Answer:
(A) It performs the functions of both journal and ledger at the same time.

Question 153.
Which of the following is/ are features of cash book
(A) All cash transactions are recorded chronologically in the cash book.
(B) It records only one aspect of transaction ie. cash.
(C) It performs the functions of both journal and ledger at the same time.
(D) All of the above
Answer:
(D) All of the above

Question 154.
Which of the following is type of cash book
(A) Single Column Cash Book
(B) Two Columnar Cash Book
(C) Three Columnar Cash Book
(D) All of the above
Answer:
(D) All of the above

Question 155.
Which of the following is the kind of a cash book
(A) Single column cash book
(B) Double-column cash book
(C) Three-column cash book
(D) All of the above
Answer:
(D) All of the above

Question 156.
Cash book is a type of ……… but treated as a……… of accounts.
(A) Principal book; subsidiary book
(B) Subsidiary book; principal book
(C) Principal book; principal book
(D) Subsidiary book; subsidiary book
Answer:
(B) Subsidiary book; principal book

Question 157.
Which of the following is not a column of a three-column cash book
(A) Discount column
(B) Petty cash column
(C) Bank column
(D) Cash column
Answer:
(D) Cash column

Question 158.
Rent due for the month of March will appear -………
(A) On the payment side of the cash book
(B) On the receipt side of the cash book
(C) Nowhere in the cash book
(D) As a contra entry
Answer:
(C) Nowhere in the cash book

Question 159.
The cash book records -………
(A) All cash payments
(B) All cash receipts
(C) All cash receipts and payments
(D) Cash and credit sale of goods.
Answer:
(C) All cash receipts and payments

Question 160.
Which of the column of the cash book can have credit opening or closing balance
(A) Cash column
(B) Bank column
(C) Discount column
(D) (B) & (C)
Answer:
(D) (B) & (C)

Question 161.
Which of the column of the cash book is never balanced -………
(A) Cash column
(B) Bank column
(C) Discount column
(D) None of the above
Answer:
(C) Discount column

Question 162.
Cash account is -………
(A) Personal account
(B) Real account
(C) Nominal account
(D) Valuation account
Answer:
(B) Real account

Question 163.
Total of debit side discount column of cash book is posted to -………
(A) Cr. of Discount Received A/c
(B) Dr. of Discount Received A/c
(C) Cr. of Discount Allowed A/c
(D) Dr. of Discount Allowed A/c
Answer:
(D) Dr. of Discount Allowed A/c

Question 164.
The debit balance of a cash account shows -………
(A) Amount receivable
(B) Amount payable
(C) Cash in hand
(D) Liability
Answer:
(C) Cash in hand

Question 165.
Contra entry appears in -………
(A) Purchases Returns Book
(B) Cash Book
(C) Journal proper
(D) All of the above
Answer:
(B) Cash Book

Question 166.
Contra entries are passed only when -………
(A) Simple cash book is prepared
(B) Three-column cash book is prepared
(C) Double-column cash book is prepared
(D) None of the above
Answer:
(B) Three-column cash book is prepared

Question 167.
If a transaction involves both cash and bank account, it is entered on both sides of the cash book, one in the cash column and second in the bank column, though on opposite sides. This is called -………
(A) Journal entry
(B) Adjustment entry
(C) Contra entry
(D) Combined entry
Answer:
(C) Contra entry

Question 168.
Payments in cash of small amounts like travelling expenses, postage, carriage etc. are recorded in the -………
(A) Main Cash book
(B) Petty cash book.
(C) Cash budget
(D) Journal proper
Answer:
(B) Petty cash book.

Question 169.
The balance in the petty cash book is -………
(A) a liability
(B) an asset
(C) a profit
(D) an expense
Answer:
(B) an asset

Question 170.
Which of the following is/are advantages of the imprest system
(A) It saves the time of the chief cashier
(B) It reduces the chances of misuse of cash by the petty cashier.
(C) It enables a great saving to be effected in the posting of small items to the ledger accounts.
(D) All of the above
Answer:
(D) All of the above

Question 171.
The petty cashier generally works on ………. system.
(A) Balancing
(B) Accrual
(C) Matching
(D) Imprest
Answer:
(D) Imprest

Question 172.
Petty Cash Book ma be treated as a -………
(A) Part of the double entry system
(B) Merely as a memoranda book
(C) Either (A) or (B)
(D) None of the above
Answer:
(C) Either (A) or (B)

Question 173.
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
Select the correct answer from the options given below –
(A) Only (i) above
(B) Only (ii) above
(C) Only (iii) above
(D) Both ( ii) and (iii) above
Answer:
(D) Both ( ii) and (iii) above

Question 174.
………… are passed at the beginning of the financial year to open the books by recording the assets, liabilities and capital appearing in the balance sheet of the previous year.
(A) Transfer Entries
(B) Adjustment Entries
(C) Closing Entries
(D) Opening Entries
Answer:
(D) Opening Entries

Question 175.
………. are used at the end of the accounting year for closing of accounts relating to expenses and revenues.
(A) Transfer Entries
(B) Adjustment Entries
(C) Closing Entries
(D) Opening Entries
Answer:
(C) Closing Entries

Question 176.
Opening, closing and adjustment entries are recorded in -……….
(A) Purchase Book
(B) Sales Book
(C) Petty Cash Book
(D) Journal Proper
Answer:
(D) Journal Proper

Question 177.
At the end of the accounting year, are to be passed for outstanding/ prepaid expenses, accrued income / income received in advance etc.
(A) Transfer Entries
(B) Adjustment Entries
(C) Closing Entries
(D) Opening Entries
Answer:
(B) Adjustment Entries

Question 178.
………… are passed in the general journal for transferring an item entered in one account to another account.
(A) Transfer Entries
(B) Adjustment Entries
(C) Closing Entries
(D) Opening Entries
Answer:
(A) Transfer Entries

Question 179.
……… are passed for rectifying errors which might have committed in the books of account.
(A) Transfer Entries
(B) Adjustment Entries
(C) Rectification Entries
(D) Opening Entries
Answer:
(C) Rectification Entries

Question 180.
A ……… is a schedule or list of balances of both debit and credit extracted from various accounts.
(A) Profit & Loss Account
(B) Balance Sheet
(C) Cash Flow Statement
(D) Trial balance
Answer:
(D) Trial balance

Question 181.
It is a check on the accuracy of posting. If the trial balance agrees it proves that -………
1. Books are arithmetically accurate.
2. Both the aspects of the transactions have been correctly recorded in the books of original entry as well as in the ledger.
The correct answer is –
(A) 1 but not 2
(B) 2 but not 1
(C) Both 1 & 2
(D) Either 1 or 2
Answer:
(C) Both 1 & 2

Question 182.
At the end of the accounting period or at the end of each month, the balances of the ledger accounts are extracted and ……… is prepared to test as to whether the total debits are equal to total credits.
(A) Profit & Loss Account
(B) Balance Sheet
(C) Cash Flow Statement
(D) Trial balance
Answer:
(D) Trial balance

Question 183.
Which of the following is/are method for preparation of trail balance
(A) Balances Method
(B) Totals Method
(C) Both (A) & (B)
(D) None of the above
Answer:
(C) Both (A) & (B)

Question 184.
If the trial balance do not agree after transferring the balance of all ledger accounts including cash and bank balance and also errors are not located timely, then the trial balance is tallied by transferring the difference of debit and credit side to an account known as -………
(A) Memorandum Account
(B) Capital Account
(C) Suspense Account
(D) Drawing Account
Answer:
(B) Capital Account

Question 185.
The balances of till assets accounts, expenses accounts, losses, drawings are placed in the ……… of the trial balance.
(A) Credit column
(B) Debit column
(C) Ledger folio
(D) None of the above
Answer:
(B) Debit column

Question 186.
The balances of all liabilities accounts, income accounts, profits, capital are placed in the………of the trial balance.
(A) Credit column
(B) Debit column
(C) Ledger folio
(D) None of the above
Answer:
(A) Credit column

Question 187.
A trial balance will not balance if -………
(A) Correct journal entry is posted twice.
(B) The purchase on credit basis is debit-ed to purchases and credited to cash.
(C) ₹ 500 cash payment to creditors is debited to creditors for ₹ 50 and credited to cash as ₹ 500.
(D) None of the above.
Answer:
(C) ₹ 500 cash payment to creditors is debited to creditors for ₹ 50 and credited to cash as ₹ 500.

Question 188.
All expense and ……… accounts appearing in the trial balance are transferred to the trading and profit and loss account.
(A) Loss
(B) Asset
(C) Liability
(D) Revenue
Answer:
(D) Revenue

Question 189.
After the preparation of ledgers, the next step is the preparation of -………
(A) Trading accounts
(B) Trial balance
(C) Profit and loss account
(D) None of the above
Answer:
(B) Trial balance

Question 190.
Difference of totals of both debit and credit side of the trial balance is transferred to -………
(A) Miscellaneous account
(B) Difference account
(C) Trading account
(D) Suspense account
Answer:
(D) Suspense account

Question 191.
Bank overdraft is shown on the side of tried balance ……………….
(A) Credit
(B) Debit
(C) None
(D) Both
Answer:
(A) Credit

Question 192.
After preparing the trial balance the accountant finds that the total of debit side is short by ₹ 1,500. This 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 account
Answer:
(B) Debited to suspense account

Question 193.
Purchase of furniture on cash for ₹ 1,50,000 will be recorded in -………
(A) Sales Book
(B) Purchase Book
(C) General Journal
(D) Cash Book
Answer:
(D) Cash Book

Question 194.
Purchased goods for ₹ 90,000 from Mr. N on credit will be recorded in -………
(A) Sales Book
(B) Purchase Book
(C) Journal Proper (General Journal)
(D) Cash Book
(B) Purchase Book

Question 195.
₹ 3,50,000 cash paid to creditors for settlement of credit purchases will be recorded in – ………
(A) Sales Book
(B) Purchase Book
(C) Journal Proper (General Journal)
(D) Cash Book
Answer:
(D) Cash Book

Question 196.
Sold furniture on cash for ₹ 1,50,000 will be recorded in -………
(A) Sales Book
(B) Purchase Book
(C) Journal Proper (General Journal)
(D) Cash Book
Answer:
(D) Cash Book

Question 197.
Sold goods for ₹ 90,000 to Mr. Z on credit will be recorded in -………
(A) Sales Book
(B) Purchase Book
(C) Journal Proper (General Journal)
(D) Cash Book
Answer:
(A) Sales Book

Question 198.
Received cash of ₹ 2,00,000 from debtors for settlement of credit sales will be recorded in – ………
(A) Sales Book
(B) Purchase Book
(C) Journal Proper (General Journal)
(D) Cash Book
Answer:
(D) Cash Book

Question 199.
Mr. N returns the goods of ₹ 50,000 purchased on credit to Mr. Z. This transaction will recorded by Mr. N in ……… and by Mr. Z in ………
(A) Sales Return Book, Purchases Return Book
(B) Purchases Return Book Sales Return Book
(C) Sales Return Book, Sales book
(D) Purchases Return Book, Purchase Book
Answer:
(B) Purchases Return Book Sales Return Book

Question 200.
If Mr. Z draws the bill of exchange for ₹ 75,000 on Mr. N. This transaction will be recorded by Mr. Z in ……… and by Mr. N in ………
(A) Bills Receivable Book, Bills Payable Book
(B) Bills Payable Book, Bills Receivable Book
(C) Bills receivable book, Purchases Book
(D) Bills Payable Book, Sales Book
Answer:
(A) Bills Receivable Book, Bills Payable Book

Question 201.
An allowance of ₹ 50 was offered for an early payment of cash of ₹ 1,050. It will be recorded in -………
(A) Sales Book
(B) Purchase Book
(C) Journal Proper (General Journal)
(D) Cash Book
Answer:
(D) Cash Book

Question 202.
A second hand motor car was purchased on credit from B & Co. for ₹ 10,000. It will be recorded in -………
(A) Journal Proper (General Journal)
(B) Cash Book
(C) Purchase Book
(D) Sales Book
Answer:
(A) Journal Proper (General Journal)

Question 203.
Goods were sold on credit basis to Mr. Ram for ₹ 10,000. It will be recorded in -………
(A) Journal Proper (General Journal)
(B) Cash Book
(C) Purchase Book
(D) Sales Book
Answer:
(D) Sales Book

Question 204.
Accounting for recovery from Mr. C of an amount of ₹ 2,000 earlier written off as bad debt will be recorded in -………
(A) Sales book
(B) Purchase book
(C) Journal Proper (General Journal)
(D) Cash book
Answer:
(D) Cash book

Question 205.
Credit purchase of stationery worth ₹ 5,000 by a stationery dealer will be recorded in -………
(A) Journal Proper (General Journal)
(B) Cash book
(C) Purchase book
(D) Sales book
Answer:
(C) Purchase book

Question 206.
A bills receivable of ₹ 10,000, which was received from a debtor in full settlement for a claim of ₹ 11,000 dishonoured will be recorded in -………
(A) Bills receivable book
(B) Journal proper (General Journal)
(C) Purchases return Book
(D) Purchase book
Answer:
(A) Bills receivable book

Question 207.
Outstanding salary ₹ 34,000 to be provided in the accounts will be recorded in -………
(A) Bills receivable book
(B) Journal proper (General Journal)
(C) Purchases Return Book
(D) Purchase book
Answer:
(B) Journal proper (General Journal)

Question 208.
A debit note for ₹ 20,000 issued to Mr. Z for goods returned by us is to be accounted for in -………
(A) Bills receivable book
(B) General journal
(C) Purchases return book
(D) Purchase book
Answer:
(C) Purchases return book

Question 209.
Investment was sold in cash for ₹ 1,00,000 at par will be recorded in -………
(A) Cash book
(B) General journal
(C) Purchases return book
(D) Purchase book
Answer:
(A) Cash book

Question 210.
Investment was sold on credit for ₹ 1,00,000 at par will be recorded in -………
(A) Cash book
(B) General journal
(C) Purchases return book
(D) Purchase book
Answer:
(B) General journal

Question 211.
Salary paid in cash – ₹ 50,000 will be recorded in -………….
(A) General journal
(B) Cashbook
(C) Purchases return book
(D) Purchase book
Answer:
(B) Cashbook

Question 212.
NSZ 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.
Select the correct answer from the options given below –
(A) Only (i) above
(B) Only (ii) above
(C) Both (i) & (iii) above
(D) Both (iv) & (v) above
Answer:
(D) Both (iv) & (v) above

Question 213.
Which of the following statements is correct
(A) The trial balance is prepared after preparing the profit and loss account.
(B) The trial balance shows only balances of assets and liabilities
(C) The trial balance shows only nominal account balances.
(D) The trial balance has no statutory importance from the point of view of law.
Answer:
(D) The trial balance has no statutory importance from the point of view of law.

Question 214.
………… is that expenditure which results in acquisition of an asset or which results in an increase in the earning capacity of a business.
(A) Capital expenditure
(B) Revenue expenditure
(C) Deferred revenue expenditure
(D) None of the above
Answer:
(A) Capital expenditure

Question 215.
Expenses whose benefit expires within the year of expenditure and which are incurred to maintain the earning capacity of existing assets are termed as -………
(A) Capital expenditure
(B) Revenue expenditure
(C) Deferred revenue expenditure
(D) None of the above
Answer:
(B) Revenue expenditure

Question 216.
There are certain expenses which may be in the nature of revenue but their benefit may not be consumed in the year in which such expenditure has been incurred; rather the benefit may extend over a number of years are termed as –
(A) Capital expenditure
(B) Revenue expenditure
(C) Deferred revenue expenditure
(D) None of the above
Answer:
(C) Deferred revenue expenditure

Question 217.
Which of the following is / are example of capital expenditure
(A) Purchases of land & buildings by the property dealer
(B) Purchases of machinery by machinery dealer
(C) Expenses incurred for getting patents
(D) All of the above
Answer:
(C) Expenses incurred for getting patents

Question 218.
Which of the following is/are example of capital expenditure
(A) Fees paid to lawyer for drawing a purchase deed of land
(B) Overhauling expenses of second hand machinery
(C) Cartage paid for bringing machinery to the factory from supplier’s premises
(D) All of the above
Answer:
(D) All of the above

Question 219.
Amounts paid for wages, salary, carriage of goods, repairs, rent and interest, etc., Eire items of -………..
(A) Capital expenditure
(B) Revenue expenditure
(C) Deferred revenue expenditure
(D) None of the above
Answer:
(B) Revenue expenditure

Question 220.
Costs incurred to acquire an asset are ………….. but costs incurred to keep them in working condition or to defend their ownership are …………..
(A) Capital expenditure, Revenue expenditure
(B) Revenue expenditure, Revenue expenditure
(C) Deferred revenue expenditure. Revenue expenditure
(D) Revenue expenditure, Capital expenditure
Answer:
(A) Capital expenditure, Revenue expenditure

Question 221.
Which of the following is/are not example of capital expenditure
(A) Money spent to reduce working expenses like conversion of hand-driven machinery to power-driven machinery
(B) Money paid for goodwill (like the right to use the established name of an outgoing firm)
(C) Expenditure which does not result in an increase in capacity or in reduction of day-to-day expenses
(D) All of the above
Answer:
(C) Expenditure which does not result in an increase in capacity or in reduction of day-to-day expenses

Question 222.
Depreciation on fixed assets is -………….
(A) Capital expenditure
(B) Revenue expenditure
(C) Deferred revenue expenditure
(D) None of the above
Answer:
(B) Revenue expenditure

Question 223.
All sums spent up to the point an asset is ready for use should also be treated as -……..
(A) Capital expenditure
(B) Revenue expenditure
(C) Deferred revenue expenditure
(D) None of the above
Answer:
(A) Capital expenditure

Question 224.
Amounts paid for wages, salary, carriage of goods, repairs, rent and interest, etc., are items of -………
(A) Capital expenditure
(B) Revenue expenditure
(C) Deferred revenue expenditure
(D) None of the above
Answer:
(B) Revenue expenditure

Question 225.
Fee paid to a lawyer for checking whether all the papers are in order before land is purchased is But if later a suit is Bled against the purchaser, the legal costs will be …………….
(A) Capital expenditure, Revenue expenditure
(B) Revenue expenditure, Revenue expenditure
(C) Deferred revenue expenditure, Revenue expenditure
(D) Revenue expenditure. Capital expenditure
Answer:
(A) Capital expenditure, Revenue expenditure