1) Balancing of accounts means _______.

(a) Total of debit side

(b) Total of credit side
(c) Difference in a total of debit side and credit side
(d) None of the above
Answer: (c) Difference in a total of debit side and credit
side
2). A cheque on which two parallel lines are drawn in the
left top corner is called ______.
(a) Bearer cheque
(b) Traveller’s cheque
(c) Account payee cheque
(d) None of the above
Answer: (c) Account payee cheque
3) The mathematical expression defining the comparative
relationship between assets and liabilities of any person,
institution, or business concern is called _____.
(a) Accounting
(b) Accounting equation
(c) Bookkeeping
(d) None of these
Answer: (b) Accounting equation
4) The process of recording a business transaction in the journal
is called ______.
(a) Costing
(b) Posting
(c) Balancing
(d) Journalising
Answer: (d) Journalising
5) According to the Double Entry System, salary paid to a clerk Ramesh is a
1.Real Transaction
2.Personal Transaction
3.Nominal Transaction
4.More than one of the above
5.None of the above
Answer Option 3 : Nominal Transaction
6) In case a Provision for Depreciation Account is NOT maintained, the correct
journal entry for recording the amount of depreciation is:
1.Profit and Loss Account Dr To Asset Account
2.Depreciation Account Dr To Profit and Loss Account
3.Depreciation Account Dr To Asset Account
4.More than one of the above
5.None of the above
Answer Option 3 :Depreciation Account Dr
To Asset Account
7) ₹1,000 paid for repair of old furniture purchased, shall be debited
to
1.Furniture Account
2.Repairs Account
3.Cash Account
4.More than one of the above
5.None of the above
Answer Option 1 : Furniture Account
8) Journal is a book of:
1.First entry
2.Original entry
3.Datewise entry
4.All of the above
Answer Option 4 : All of the above
9) Which qualitative characteristics of accounting information
are reflected when accounting information is clearly presented?
(a) Comparability
(b) Understandability
(c) Relevance
(d) Reliability
Answer: (b) Understandability
10. The process of recording, classifying, and summarising all
business transactions in order to know the financial result is
called ______.
(a) Bookkeeping
(b) Accounting
(c) Journalising
(d) None of these
Answer: (b) Accounting
11) As per Schedule III of the Companies Act, 2013, which of the following would be
considered as an intangible asset?
(i) Goodwill
(ii) Brand / Trademark
(iii) Computer software
(iv) Publication title
1.(ii) and (iii) only
2.(i), (ii), (iii) and (iv)
3.(i), (ii) and (iv)
4.More than one of the above
5.None of the above
Answer Option 2 : (i), (ii), (iii) and (iv)
12) Bill receivable account is ______.
1.all expense account
2.a nominal account
3.a revenue expenditure account
4.a personal account
Answer Option 4 : a personal account
13) Prepaid insurance is shown as _______ in the balance sheet.
1.Asset
2.Liability
3.Capital
4.Profit and loss account only
Answer Option 1 : Asset
14) As per the format of Balance sheet prescribed as per Schedule
III of Companies Act 2013, Mining rights is shown under the
heading of:
1.Other Non-current assets
2.Intangible assets
3.Investments
4.Fixed Assets
Answer Option 2 : Intangible assets
15) Which of the following options is a revenue expenditure?
1.Wages paid to own employees for building the foremen's offices.
2.Incurred expenditure of ₹25,000 on varied advertisement campaigns undertaken yearly,
on a regular basis, during the peak festival season.
3.Materials purchased for extension to foremen's offices in the factory.
4.More than one of the above
5.None of the above
Answer Option 2 : Incurred expenditure of ₹25,000 on varied advertisement campaigns
undertaken yearly, on a regular basis, during the peak festival season.
16) Which of the following statements is true in the context of capital and revenue
expenditure?
1.Legal fees to acquire property is capital expenditure.
2.Overhaul expenses of a second-hand machine purchased are revenue expenditure.
3.Expenses in connection with obtaining a license for running a cinema are revenue
expenditure.
4.More than one of the above
5.None of the above
Answer Option 1 : Legal fees to acquire property is capital expenditure.
17) Capital expenditure will be reflected in
1.Trading account
2.Profit and loss account
3.Profit and loss appropriation account
4.Balance sheet
Answer Option 4 : Balance sheet
18) Amount spent on increasing the seating capacity of a cinema
hall is called
1.Personal expenditure
2.Nominal expenditure
3.Capital expenditure
4.Revenue expenditure
Answer Option 3 : Capital expenditure
19) Which of the following is not an Accounting concept?
a) Matching concept
b) Dual Aspect concept
c) True and Fair concept
d) Going concern concept
Ans C
20. According to going concern, a business is assumed as having:
a) a limited life
b) a indefinite life
c) a very long life
d)None of the above
Ans b
21) According to money measurement concept, which of the following
will not be recorded in the books of accounts?
a) extra profits arising out of revaluation of assets
b) commission payable to a salesman
c) quality of the products
d) all of these
Ans C
22) Non-financial quantitative information is not recorded in accounts
due to:
a) dual concept
b) accrual concept
c) money measurement concept
d)entity concept.
Ans c
23) Capital will reduce by
A. Purchase of goods on credit
B. Selling the goods for cash
C. Furniture purchase for personal use
D. None of these
Ans C
24) Liabilities increased by
A. Purchasing goods on credit
B. Rent due
C. Taking of bank loan
D. All
Ans d
25) Both assets and owner’s equity would increase by
A. Proprietor’s Drawings
B. Purchase Machine on credit
C. Payment to creditor
D. Retained earning
Ans D
26. The favorable balance of profit and loss account
should be
A. Added in liabilities
B. Subtracted from current assets
C. Subtracted from liabilities
D. Added on Capital
Ans D
27) Income received in advance will be
A. Added to liability and cash
B. Added to capital and cash
C. Deducted from liability and cash
D. Added to liabilities and deducted from cash
Ans A
28. Withdrew goods for personal use will
A. Reduce stock and increase capital
B. Reduce stock and reduce capital
C. Increase stock and reduce capital
D. Increase stock and increase capital
Ans B
29) M/s X Limited has received Rs. 5,00,000 compensation from Municipal Corporation
on acquisition of an agricultural land for construction of road or bridges. Which kind of
receipt is this?
1.It is a capital receipt.
2.It is a revenue receipt
3.It is a deferred revenue receipt.
4.It is not a receipt
Answer Option 1 : It is a capital receipt.
Basis Capital Exp. Revenue Exp.
Nature non-recurring recurring
improve earning maintain earning
Purpose
capacity capacity
Recording balance sheet P&L a/c
Nature of A/C real account nominal account
Duration for long period for an accounting year
30) The amount spent to increase the earning capacity of a
business is:
1.Capital loss
2.Deferred revenue expenditure
3.Revenue expense
4.Capital expenditure
Answer Option 4 : Capital expenditure
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