Objective Type Questions
Time Allowed : 25 Minutes Maximum Marks : 25
In each of the following questions choose the correct answer :
1. Trial balance is prepared to find out the
a) profit or loss b) financial position c) arithmetical accuracy of the accounts
2. Suspense account in the trial balance is entered in the
a) Trading A/c b) Profit and loss A/c c) Balance sheet
3. Suspense account having credit balance will be shown on the
a) Credit side of the profit and loss A/c b) Liabilities side of the balance sheet
c) Assets side of the balance sheet
4. State which of the following errors will not be revealed by the Trial Balance.
a) Errors of complete omission. b) Error of carrying forward. c) Wrong totalling of the
purchases book
5. Errors which affect one side of an account are called
a) Single sided errors b) Double sided errors c) None of the above.
6. Amount spent on servicing office Typewriter should be debited to:
a) Miscellaneous Expenses Account. b) Typewriter Account. c) Repairs Account.
7. Wages paid to workers for the installation of a new Machinery should be debited to:
a) Wages Account b) Machinery Account c) Factory Expenses Account
8. Salary paid to Manager must be debited to
a) Manager’s Account b) Office Expenses Account c) Salary Account.
9. Goods taken by the proprietor for domestic use should be credited to
a) Proprietor’s Drawings Account. b) Sales Account. c) Purchases Account.
10. Cash received from Mani whose account was previously written off as a Bad Debt should be
credited to:
a) Mani’s Account. b) Miscellaneous Income Account. c) Bad Debts Recovered Account.
11. Bank Reconciliation statement is prepared by the
a) bank b) creditor of a business c) customer of a bank
12. Debit balance in the Cash Book means
a) overdraft as per Pass Book b) credit balance as per Pass Book c) overdraft as per Cash
Book
13. When balance as per Cash Book is the starting point, to ascertain balance as per pass book
interest allowed by Bank is
a) subtracted b) added c) not adjusted
14. When balance as per Cash Book is the starting point, to ascertain the balance as per pass book
interest charged by Bank is:
a) added b) subtracted c) not adjusted
15. When the balance as per Cash Book is the starting point to ascertain balance as per pass book,
direct deposits by customers are:
a) added b) subtracted c) not adjusted
16. When the balance as per Cash Book is the starting point to ascertain balance as per pass book,
direct payment by bank are:
a) added b) subtracted c) not adjusted
17. A bank pass book is a copy of
a) the cash column of a customer’s cash book. b) the bank column of a customer’s cash book. c) the
customer’s account in the bank’s ledger.
18. The bank statement shows an overdrawn balance of Rs.2,000. A cheque for Rs.500 drawn in
favour of a creditor has not yet been presented for payment. When the creditor presents the
cheque for payment, the bank balance will be
a) Rs. 1,500 b) Rs. 2,500 (overdrawn) c) Rs.2,500
19. The cash book records
a) all cash payments b) all cash receipts c) all cash receipts & payments
20. When goods are purchased for cash, the entry will be recorded in the
a) cash book b) purchases book c) journal
21. The balance of cash book indicates
a) Net income b) cash in hand c) difference between debtors and creditors
22. In triple column cash book, cash withdrawn from bank for office use will appear in
a) debit side of the cash book only b) both sides of the cash book.
c) credit side of the cash book only.
23. If a cheque sent for collection is dishonoured, the debit is given to
a) suppliers A/c b) bank A/c c) customers A/c
24. If a cheque issued by us is dishonoured the credit is given to
a) supplier’s A/c b) customer’s A/c c) bank A/c
25. Purchase of machinery is recorded in
a) sales book b) journal proper c) purchases book
26. Amount spent in order to produce and sell the goods and services is called
a) expense b) income c) revenue
27. Purchases book is kept to record
a) all purchases b) only cash purchases c) only credit purchases
28. Goods returned by customers are recorded in
a) sales book b) sales return book c) purchases return book
29. The debts owing to others by the business is known as
a) liabilities b) expenses c) debtors
30. Assets minus liabilities is
a) drawings b) capital c) credit
Objective Type Questions
Time Allowed : 30 Minutes Maximum Marks : 30
In each of the following questions choose the correct answer out of the choices
given:
1. Ledger is a book of :
a. original entry b. final entry c. all cash transactions.
2. Personal and real accounts are:
a. closed b. balanced c. closed and transferred
3. The column of ledger which links the entry with journal is
a. L.F column b. J.F column c. Particulars column
4. Posting on the credit side of an account is written as
a. To b. By c. Being
5. Nominal account having credit balance represents
a. income / gain b. expenses / losses c. assets
6. Nominal account having debit balance represents
a. income / gain b. expenses / losses c. liability
7. Real accounts always show
a. debit balances b. credit balances c. nil balance.
8. Account having credit balance is closed by writing
a. To Balance b/d b. By Balance c/d c. To Balance c/d
9. When the total of debits and credits are equal, it represents
a. debit balance b. credit balance c. nil balance
10. The balances of personal and real accounts are shown in the
a. profit and loss account b. balance sheet c. both.
11. The origin of a transaction is derived from the
a) Source document b) Journal c) Accounting equation
12. Which of the following is correct?
a) Capital = Assets + Liabilities b) Capital = Assets – Liabilities c) Assets = Liabilities – Capital
13. Amount owned by the proprietor is called
a) Assets b) Liabilities c) Capital
14. The Accounting Equation is connected with
a) Assets only b) Liabilities only c) Assets, Liabilities and capital
15. Goods sold to Srinivasan should be debited to
a) Cash A/c b) Srinivasan A/c. c) Sales A/c.
16. Purchased goods from Venkat for cash should be credited to
a) Venkat A/c b) Cash A/c c) Purchases A/c
17. Withdrawals of cash from bank by the proprietor for office use should be credited to
a) Drawings A/c b) Bank A/c c) Cash A/c
18. Purchased goods from Murthy on credit should be credited to
a) Murthy A/c b) Cash A/c c) Purchases A/c
19. An entry is passed in the beginning of each current year is called
a) Original entry b) Final entry c) Opening entry
20. The liabilities of a business are Rs.30,000; the capital of the proprietor is Rs.70,000. The total
assets are:
a) Rs.70,000 b) Rs.1,00,000 c) Rs.40,000
21. The receiving aspect in a transaction is called as
a) debit aspect b) credit aspect c) neither of the two
22. The giving aspect in a transaction is called as
a) debit aspect b) credit aspect c) neither of the two
23. Murali account is an example for
a) personal A/c b) real A/c c) nominal A/c
24. Capital account is classified under
a) personal A/c b) real A/c c) nominal A/c
25. Goodwill is an example of
a) tangible real A/c b) intangible real A/c c) nominal A/c
26. Commission received is an example of
a) real A/c b) personal A/c c) nominal A/c
27. Outstanding rent A/c is an example for
a) nominal account b) personal account c) representative personal account
28. Nominal Account is classified under
a) personal A/c b) impersonal A/c c) neither of the two
29. Drawings account is classified under
a) real A/c. b) personal A/c. c) nominal A/c.
30. Credit sales are recorded in
a) sales book b) cash book c) journal proper
1. Benefits of preparing Bank Reconciliation Statement includes ---------
(a).It bring out any errors committed in preparation of Cash book / Bank Pass Book.
(b).Highlights under delay in clearance of cheques deposited but not credited. (c).Help
know actual bank balance (d).All the three.
2.Debit balance as per bank pass book mean ----------
(a).Surplus cash. (b).Bank Overdraft. (c).Terms deposits with bank. (d).None of these.
3. Which of these errors does not affect agreement of Trial Balance.
a) Errors of principle b) Complete omission in subsidiary books. c) Compensating errors
d) All the three.
4. Which of these errors effect only one account.
a)Errors of casting. b) Errors of carry forward. c) Errors of posting. d) All the three.
5. Which of the following is not a cause of difference in balance as per cash book and
balance as per bank pass book ---------
(a).Errors in cash book (b).Errors in pass book (c).Cheques deposited and cleared
(d).Cheques issued but not presented for payment.
6. Which of the following is not depreciated.
(a).Building (b).Land (c).Plant and Machinery (d).Office equipment
7.Cash book records---------
(a).Only cash sales (b).All types of cash receipts and payments (c).Only revenue
receipts (d).Only capital receipts.
8. In a three column cash----------does not exist
(a).Cash column.(b).Bank column. (c).Petty cash column.(d).Discount column.
9. Which of these transactions will not be recorded in cash book---------
(a).Cash received from debtors.(b).Cash paid to creditors.(c).Salary remained
outstanding.(d).Cash deposited with bank.
10. Which of these errors affect two or more accounts.
a) Errors of complete omission b) Errors of principle. c) Errors of posting to wrong
account. d) All the three.
11. Which of the following error is an error of principle.
a) 5,000 received from Sham credited to Ram A/c b) 5,000 incurred on installation of
new plant debited to travelling expenses A/c c) 500 paid for wages debited to salary A/c
d) 500 being purchase of raw material debited to purchase A/c 50.
12. Which of the following is an one sided error.
a) 500 purchase of old equipment not recorded in the books of A/c at all.b) 500 being
expense on travelling expense credited to travelling expenses. c) Both.d) None.
13. Which of the following is a real A/c
a) Salary A/c b)Bank A/c c) Building A/c d) Goodwill A/c
14. Which of the following is a personal A/c
a) Outstanding Salary A/c. b) Rent A/c c) SBI A/c. d) Bad debts A/c.
15. Which of the following is a representative personal A/c.
a)Outstanding salary A/c. b) Rent A/c. c) SBI A/c. d) Bad debts A/c.
16.The closing balance of a petty cash book is a / an ------
(a).Liability.(b).Gain.(c).Assets. (d). Loss
17. Which column of a cash book will not have credit balance -------
(a). Bank column. (b). Discount column (c). Cash column (d). None.
18. Petty cash balance is a/an ---------
(a). Assets. (b). Expenditure (c).Liability (d). None
19. Which of these is a Part of cash in hand
(a).Postage stamps. ; (b). B/R (c). Cheque Deposited with Bank (d). B/R endorsed.
20.Posting is the process of ----------
a) Posting the letters in drop box. b) Posting suitable person to a suitable job. c)
Entering in the ledger the information contained in the ledger. d) All the three.
21. Which of the following is a nominal A/c
a) Outstanding Salary A/c. b) Rent A/c. c) SBI A/c. d) Debtors A/c.
22. Goodwill A/c is a----------
a) Nominal A/c. b) Tangible asset. c) Intangible asset. d)Fictitious asset.
23. Sales day book records
(a).All sales.(b).All credit sales of manufactured or traded goods.(c).All credit
sales.(d).Only cash sales.
24. Purchase day book records
(a).All cash purchases(b).All credit purchases(c).Only credit purchase of raw material or
goods purchased for resale.(d).All purchases.
25. A book wherein various accounts are opened is called ------
a) Subsidiary books. b) Journal.c) Ledger.d) Trial Balance.
26. Which of these is not a special purpose journal
a) Cash journal. b)Purchase journal. c) Debtors journal.d) Sales journal.
27. Journal is also known by -----
(a).Memorandum A/c.(b).Kaccha books.(c).Books of original entry.(d).Proper books.
28. The periodic total of sales day book is posted to ---------
a) Sales A/c. b) Cash sales A/c. c) Sales return A/c, d) Credit sales A/c
29. The periodic total of purchase day book is posted to ---------
a) Purchase register. b) Purchase A/c c) Cash purchase A/c d) Credit purchase A/c.
30. Closing entries are generally passed----
(a). At the time of opening new books of account (b).At the time of closing the accounts
(c).During the course of accounting period any time. (d).After certification of accounts
31. Closing stock appearing in the trial balance is shown in –
(a).Trading A/c and balance sheet (b).Profit and loss A/c. (c).Balance sheet only
(d).Trading A/c only
32. The periodic total of sale day book is posted to --------
(a).Trading A/c.(b).Profit and Loss A/c.(c).Sales A/c.(d).Manufacturing A/c.
33. The periodic total of purchase day book is posted to ---------
(a).Creditors A/c. (b).Debtors A/c (c). Purchase A/c. (d). None
34. Bank reconciliation is a statement prepared to reconcile----
(a).Trial balance (b).Cash book (c).Bank A/c (d).Cash as per cash book with bank
balance as per bank pass book.
35. Bank reconciliation statement is a part of –
(a).Cash book. (b).Trial balance. (c).Auditors report. (d).None of these.
36. Depreciation account appearing in the trial balance is shown in –
(a). Profit and loss A/c (b).Trading A/c (c).Deducted from the concerned assets A/c
(d). Shown on the liability side.
37. Profit on sale of old plant is shown –
(a).In trading A/c (b).In profit and loss appropriation A/c (c).Profit and loss A/c (d).Being
a non operating item ignored
38. Carriage on goods purchased is shown in ------
(a).Profit and loss A/c (b).Capitalized with work in progress (c).Trading A/c (d).Shown in
balance sheet.
39. Arrangement of Balance Sheet in a logical order is known as ---------
(a).Dressing balance sheet. (b).Marshalling balance sheet. (c).Formatting balance
sheet.(d). Make up of balance sheet.
40. In a three column cash book the discount columns are
a) Totaled but not adjusted b) Totaled and adjusted c) Totaled but not balanced
d) None of the above
Objective Type Questions
Time Allowed : 30 Minutes Maximum Marks : 22
In each of the following questions choose the correct answer out of the choices given:
1. The following items appear in Amits Trial Balance:
Outstanding Wages Rs. 1,500. It will appear in:
(a) Profit and Loss Account (b) Balance Sheet (c) None of the above
2. Returns inwards are deducted from:
(a) Sales (b) Purchases (c) Returns outward
3. Income tax paid by Mr. Arun amounts to Rs.2,000. The accounting treatment is:
(a) To be credited to the Profit and Loss Account (b) To be ignored altogether (c) To be
deducted from capital (d) To be debited to the Profit and Loss a/c
4 Bimal’s Trial Balance shows the following item: Opening stock Rs. 30,000
(a) Debited to the Profit and Loss Account (b) Deducted from the closing stock in the Balance
Sheet (c) None of the above
5. Ajits Trial Balance contains the following information:
Bad debts Rs. 2,000, Provision for Bad debts Rs. 2,500
It is desired to make a provision for bad debts of Rs 3,000 at the end of the year.
The amount to be debited to the Profit and Loss Account is:
(a) Rs. 3,000 (b) Rs. 4,500 (c) Rs. 2,500 (d) Rs. 5,000 (e) Rs. 7,500
6. Mohan’s trial balance provides you the following information:
Bad debts Rs. 800, Provision for bad debts Rs. 3,000
It is desired to maintain a provision for bad debts of Rs.2,000
The accounting treatment of these adjustments is:
(a) Rs 1800 to be debited to the Profit and Loss Account (b) Rs. 200 to be credited to the Profit
and Loss Ac count (c) Rs. 200 to be debited to the Profit and Loss Account (d) Rs. 4,200 to be
debited to the Profit and Loss Account
7 . Govind’s Trial Balance contains the following information:
Discount allowed Rs. 500, Provision for discount on debtors Rs. 1,000
The amount to be debited to the Profit and Loss Account is:
(a) Rs. 1,200 (b) Rs. 3,200 (c) Rs. 700 (d) Rs. 2,200 (e) None of the above
8. Dinesh’s trial balance contains the following information:
Discount received Rs. 1,000, Provision for discount on creditors Rs. 1,500
It is desired to maintain a provision for discount on creditors at Rs.1,000.
The amount to be credited to the Profit and Loss Account is:
(a) Rs. 1,500 (b) Rs. 3,500 (c) Rs. 1,000 (d) Rs. 500
9. Bishan’s capital on January 1,1988 Rs. 50,000
Interest on drawings Rs. 2,000, Interest on capital Rs. 5,000, Drawings Rs. 20,000, Profit
for the year Rs. 10,000
His capital at the end of the year is:
(a) Rs. 67,000 (b) Rs. 43,000 (c) Rs. 47,000 (d) Rs. 69,000
10. Yogesh’s trial balance contains the following information:
Bad debts Rs. 3,000, Provision for bad debts Rs. 4,000, Sundry debtors Rs.25,000
It is desired to create provision for bad debts at 10% on sundry debtors at the end of the
year.
Sundry debtors will appear in the Balance Sheet at a figure of:
(a) Rs. 22,500 (b) Rs. 21,000 (c) Rs. 18,000 (d) Rs. 15,500 (e) Rs. 23,500
11. Chetan’s trial balance contains the following information:
Bad debts Rs. 4,000
Discount allowed Rs. 2,000
Provision for discount on debtors Rs. 2,200
Provision for bad debts Rs. 4,500
Sundry debtors Rs.50,000
At the end of the year, it is desired to maintain a provision for bad debts at Rs. 4,000 and
provision for discount on debtors at Rs, 2,000.
Sundry debtors will appear in the Balance Sheet at a figure of:
(a) Rs. 44,000 (b) Rs. 38,000 (c) Rs. 44,700 (d) Rs. 31,300
12. Baijnath’s trial balance as on March 31,2000, contains the following information:
Bank loan Rs. 50,000
(12% rate of interest)
Interest paid Rs. 5,000
Interest debited to the Profit and Loss Account is:
(a) Rs. 6,000 (b) Rs. 5,000 (c) Rs. 5,500 (d) Rs. 1,000
13. Trading account is prepared to find out
(a) gross profit or loss (b) net profit or loss (c) financial position
14. Wages is an example of
a) capital expenses (b) indirect expenses (c) direct expenses
15. Opening stock is
a) debited in trading account (b) credited in trading account (c) credit in profit and loss
account
16. Balance sheet is a
a) statement (b) account (c) ledger
17. Fixed assets have
a) short life (b) long life (c) no life
18. Cash in hand is an example of
a) current assets (b) fixed assets (c) current liability
19. Capital is a
a) income (b) assets (c) liability
20. Drawing must be deducted from
a) net profit (b) capital (c) gross profit
21. Current liabilities are recorded in the balance sheet on
a) not recorded (b) liability side (c) assets side
22. Net profit is added to
a) gross profit (b) drawings (c) capital
Objective Type Questions
Time Allowed : 25 Minutes Maximum Marks : 20
In each of the following questions choose the correct answer out of the choices
given:
Q.1 Correct stages of double entry system is:
(a) Journal, Trial Balance, Ledger (b) Ledger, Trial Balance, Journal
(c) Trial Balance, Journal, Ledger (d) Journal, Ledger, Trial Balance
Q.2 Account which represents owner of the business is:
(a) Drawing A/C (b) Creditors A/C (c ) Furniture A/C (d) Sales A/C
Q.3 Drawing A/c will be effected on paid off:
(a) Sales tax (b) Excise duty (c) Income Tax (d) None of the above
Q.4 The debit balance of personal account shows:
(a) Amount payable (b) Amount receivable (c) Cash in hand (d) Bills Payable
Q.5 Discount allowed 769. In the trial balance this is to be shown in the:
(a) Debit side (b) Credit side (c) Both of them (d) none of them
Q.6 Wages paid on the erection of new machinery should be debited to:
(a) Cash A/c (b) Wages A/c (c) Machinery A/c (d) Prepaid wages A/c
Q.7 ‘Salaries and wages’ appear on the _______________ account :
(a) Debit side of Trading A/C (b) Credit side of Trading A/C (c) Debit side
of Profit & Loss A/C (d) Credi side of Profit & Loss A/C
Q.8 Stock is:
(a) Fixed asset (b) Current asset (c) Liquid assets (d) Tangible assets
Q.9 Unaccrued Income is:
(a) A liability (b) An asset (c) An expense (d) None of these
10. Which of the following errors will not affect the Trial Balance?
(i) Wrong balancing of an account (ii) Writing an amount in the wrong account but on
the correct side (iii) Wrong totaling of an account (iv) None of the above
11. Which of the following errors is an error of omission?
(i) Sale of Rs.500 was written in the purchases journal (ii) Wages paid to Mohan have
been debited to his account. (iii) The total of the sales journal has not been posted to
the Sales Account (iv) None of the above
12. Purchase of office furniture for Rs.3,400 has been debited to General Expenses
Account. It is:
(i) An error of commission (ii) An error of omission (iii) An error of principle
(iv) None of the above
13. Which of the following errors will affect the Trial Balance Account?
(i) Repair to buildings have been debited to buildings.
(ii) The total of purchases journal is Rs.1,000 short.
(iii) Freight paid on new machinery has been debited to the Freight account
(iv) None of the above
14. Errors of commission do not allow:
(i) Correct totaling of the Balance Sheet (ii) Correct totaling of the Trial Balance
(iii) The Trial Balance to agree (iv) None of the above
15. The preparation of a Trial Balance helps in:
(i) Locating errors of complete omission (ii) Locating errors of principle
(iii) Locating errors of commission (iv) None of the above
16. Which of the following errors is an error of principle
(i) Rs. 500 received from Ganpat has been debited to his account
(ii) Purchase of Rs.1,000 has been entered in the sales journal
(iii) Repairs to buildings have been debited to Buildings Account
(iv) None of the above
17. Which of the following errors is an error of principle
(i) Rs.500 received from Rakesh has been debited to his account
(ii) Sales of Rs.1,000 has been entered in the Purchases journal
(iii) Repairs to Machinery have been debited to Machinery Account
(iv) None of the above
18. The type of account with a normal credit balance is:
(i) An asset (ii) A drawing (iii) A revenue (iv) An expense
19. The form listing the balances and the title of the accounts in the ledger on a given
date is the :
(i) Income statement (ii) Balance Sheet (iii) Retained earnings statement
(iv) Trial Balance
20. Indicate which of the following account will have ‘debit’ balance.
(i) Goodwill (ii) Outstanding Wages (iii) Capital (iv) Bills Payable.
Objective Type Questions
Time Allowed : 25 Minutes Maximum Marks : 20
In each of the following questions choose the correct answer out of the choices
given:
1. Trial balance is prepared to find out the
a) profit or loss b) financial position c) arithmetical accuracy of the accounts
2. Suspense account in the trial balance is entered in the
a) Trading A/c b) Profit and loss A/c c) Balance sheet
3. Suspense account having credit balance will be shown on the
a) Credit side of the profit and loss A/c b) Liabilities side of the balance sheet
c) Assets side of the balance sheet
4. State which of the following errors will not be revealed by the Trial Balance.
a) Errors of complete omission. b) Error of carrying forward. c) Wrong
totalling of the purchases book
5. Errors which affect one side of an account are called
a) Single sided errors b) Double sided errors c) None of the above.
6. Amount spent on servicing office Typewriter should be debited to:
a) Miscellaneous Expenses Account. b) Typewriter Account. c) Repairs Account.
7. Wages paid to workers for the installation of a new Machinery should be debited to:
a) Wages Account b) Machinery Account c) Factory Expenses Account
8. Salary paid to Manager must be debited to
a) Manager’s Account b) Office Expenses Account c) Salary Account.
9. Goods taken by the proprietor for domestic use should be credited to
a) Proprietor’s Drawings Account. b) Sales Account. c) Purchases Account.
10. Cash received from Mani whose account was previously written off as a Bad Debt
should be credited to:
a) Mani’s Account. b) Miscellaneous Income Account. c) Bad Debts Recovered
Account.
[Answers: 1. (c), 2. (c), 3. (b), 4. (a), 5. (a), 6. (c), 7. (b), 8. (c), 9. (c), 10. (c)]
b) Choose the correct answer:
1. Bank Reconciliation statement is prepared by the
a) bank b) creditor of a business c) customer of a bank
2. Debit balance in the Cash Book means
a) overdraft as per Pass Book b) credit balance as per Pass Book c) overdraft as
per Cash Book
3. When balance as per Cash Book is the starting point, to ascertain balance as per pass
book interest allowed by Bank is
a) subtracted b) added c) not adjusted
4. When balance as per Cash Book is the starting point, to ascertain the balance as per
pass book interest charged by Bank is:
a) added b) subtracted c) not adjusted
5. When the balance as per Cash Book is the starting point to ascertain balance as per
pass book, direct deposits by customers are:
a) added b) subtracted c) not adjusted
6. When the balance as per Cash Book is the starting point to ascertain balance as per
pass book, direct payment by bank are:
a) added b) subtracted c) not adjusted
7. A bank pass book is a copy of
a) the cash column of a customer’s cash book. b) the bank column of a customer’s cash
book.
c) the customer’s account in the bank’s ledger.
8. The bank statement shows an overdrawn balance of Rs.2,000. A cheque for Rs.500
drawn in favour of a creditor has not yet been presented for payment. When the creditor
presents the cheque for payment, the bank balance will be
a) Rs. 1,500 b) Rs. 2,500 (overdrawn) c) Rs.2,500
[Answers : 1. (c), 2. (b), 3. (b), 4. (b), 5. (a), 6. (b), 7. (c), 8. (b)]
c) Choose the correct answer:
1. The cash book records
a) all cash payments b) all cash receipts c) all cash receipts & payments
2. When goods are purchased for cash, the entry will be recorded in the
a) cash book b) purchases book c) journal
3. The balance of cash book indicates
a) net income b) cash in hand c) difference between debtors and creditors
4. In triple column cash book, cash withdrawn from bank for office use will appear in
a) debit side of the cash book only b) both sides of the cash book. c) credit
side of the cash book only.
5. If a cheque sent for collection is dishonoured, the debit is given to
a) suppliers A/c b) bank A/c c) customers A/c
6. If a cheque issued by us is dishonoured the credit is given to
a) supplier’s A/c b) customer’s A/c c) bank A/c
[Answers : 1 (c), 2. (a), 3. (b), 4. (b), 5. (c), 6. (a)]
b) Choose the correct answer :
1. Purchase of machinery is recorded in
a) sales book b) journal proper c) purchases book
2. Purchases book is kept to record
a) all purchases b) only cash purchases c) only credit purchases
3. Credit sales are recorded in
a) sales book b) cash book c) journal proper
4. Goods returned by customers are recorded in
a) sales book b) sales return book c) purchases return book
b) Choose the correct answer :
1. Ledger is a book of :
a. original entry b. final entry c. all cash transactions.
2. Personal and real accounts are:
a. closed b. balanced c. closed and transferred
3. The column of ledger which links the entry with journal is
a. L.F column b. J.F column c. Particulars column
4. Posting on the credit side of an account is written as
a. To b. By c. Being
5. Nominal account having credit balance represents
a. income / gain b. expenses / losses c. assets
6. Nominal account having debit balance represents
a. income / gain b. expenses / losses c. liability
7. Real accounts always show
a. debit balances b. credit balances c. nil balance.
8. Account having credit balance is closed by writing
a. To Balance b/d b. By Balance c/d c. To Balance c/d
9. When the total of debits and credits are equal, it represents
a. debit balance b. credit balance c. nil balance
10. The balances of personal and real accounts are shown in the
a. profit and loss account b. balance sheet c. both.
[Answers: 1 (b), 2. (b), 3. (b), 4. (b), 5. (a), 6. (b), 7. (a), 8. (c), 9. (c), 10. (b)]
b) Choose the correct answer:
1. The origin of a transaction is derived from the
a) Source document b) Journal c) Accounting equation
2. Which of the following is correct?
a) Capital = Assets + Liabilities b) Capital = Assets – Liabilities
c) Assets = Liabilities – Capital
3. Amount owned by the proprietor is called
a) Assets b) Liabilities c) Capital
4. The Accounting Equation is connected with
a) Assets only b) Liabilities only c) Assets, Liabilities and capital
5. Goods sold to Srinivasan should be debited to
a) Cash A/c b) Srinivasan A/c. c) Sales A/c.
6. Purchased goods from Venkat for cash should be credited to
a) Venkat A/c b) Cash A/c c) Purchases A/c
7. Withdrawals of cash from bank by the proprietor for office use should be credited to
a) Drawings A/c b) Bank A/c c) Cash A/c
8. Purchased goods from Murthy on credit should be credited to
a) Murthy A/c b) Cash A/c c) Purchases A/c
9. An entry is passed in the beginning of each current year is called
a) Original entry b) Final entry c) Opening entry
10. The liabilities of a business are Rs.30,000; the capital of the proprietor is Rs.70,000.
The total assets are:
a) Rs.70,000 b) Rs.1,00,000 c) Rs.40,000
[Answers : 1. (a), 2. (b), 3. (c), 4. (c), 5. (b), 6. (b), 7. (b), 8. (a), 9.(c), 10 (b)]
b) Choose the correct answer:
1. The receiving aspect in a transaction is called as
a) debit aspect b) credit aspect c) neither of the two
2. The giving aspect in a transaction is called as
a) debit aspect b) credit aspect c) neither of the two
3. Murali account is an example for
a) personal A/c b) real A/c c) nominal A/c
4. Capital account is classified under
a) personal A/c b) real A/c c) nominal A/c
5. Goodwill is an example of
a) tangible real A/c b) intangible real A/c c) nominal A/c
6. Commission received is an example of
a) real A/c b) personal A/c c) nominal A/c
7. Outstanding rent A/c is an example for
a) nominal account b) personal account c) representative personal
account
8. Nominal Account is classified under
a) personal A/c b) impersonal A/c c) neither of the two
9. Drawings account is classified under
a) real A/c. b) personal A/c. c) nominal A/c.
[Answers : 1. (a), 2. (b), 3. (a), 4. (a), 5. (b), 6. (c), 7. (c), 8. (b), 9. (b)]
b) Choose the correct answer:
1. The debts owing to others by the business is known as
a) liabilities b) expenses c) debtors
2. Assets minus liabilities is
a) drawings b) capital c) credit
3. A written document in support of a transaction is called
a) receipt b) credit note c) voucher
4. Business transactions may be classified into
a) three b) two c) one
5. Purchases return means goods returned to the supplier due to
a) good quality b) defective quality c) super quality
6. Amount spent in order to produce and sell the goods and services is called
a) expense b) income c) revenue
[Answers: 1. (a), 2. (b), 3. (c), 4. (b), 5. (b), 6. (a)]
3. Indicate whether the following accounts will have ‘debit’ or ‘credit’ balances:
(i) Sales Returns
(ii) Carriage Inwards
(iii) Purchases
(iv) Outstanding Wages
(v) Capital Account
(vi) Machinery
(vii) Goodwill
(viii) Cash in Hand
(ix) Cash at Bank
(x) Bills Payable.
1. Fill in the Blanks
(i) Errors of principle ____________ affect the Trial Balance.
(ii) The equality of ___________ and ___________ of the Trial Balance does not
mean that the individual accounts are also _________
(iii) All ______________ and ______________ accounts appearing in the Trial
Balance are transferred to the Trading and Profit and Loss Account.
(iv) If the Trial Balance does not ___________ it indicates that some______
have been committed.
(v) A Suspense Account facilitates the ____________ of financial statements
even when the ___________ has not tallied.
