Question # 1.
A company’s financial position is portrayed in;
A. Balance sheet
B. Owner’s Equity statement
C. Statement of Profit and loss
D. Cash flows
Question # 2. Aslam purchased a car for two million. He used the car for 10 years and sold it at a scrap
value of 7 lacks. Yearly depreciation expense for car will be;
A. 0.13 million
B. 1.3 million
C. 13 million
D. 13,000
Question # 3. A company produces 25 units of product A with variable cost of 2 per unit. Fixed
overheads of company are 50 rupees. What price they should set to end-up at breakeven
point?
A. 4
B. 2.5
C. 6
D. 2
Question # 4. A company produces 25 units of product A with variable cost of 2 per unit. Fixed
overheads of company are 50 rupees. What price they should set to earn a profit of 50
rupees.
A. 6
B. 2.5
C. 4
D. 2
Question # 5. Investment in the business by the owner(s) is classified as;
A. Financing activity
B. Investing activity
C. Revenue activity
D. Operating activity
Question # 6. Asma purchased office furniture for 200,000 rupees from business capital. This activity is
classified as;
A. Investing
B. Financing
C. Operating
D. Capital gain
Question # 7. Asma purchased office furniture for 200,000 rupees from her personal bank account and
used that asset solely for business. Such transaction will be classified as;
A. Financing activity
B. Operating activity
C. Investing activity
D. Capital gain
Question # 8. Collection of revenue in cash is_____________ activity.
A. Operating activity
B. Profit generation activity
C. Investing activity
D. Financing activity
Question # 9. Receiving a bill today; payable later, will be recognized as;
A. None of them
B. Operating
C. Financing
D. Investing
Question # 10. Payment of current bills in cash is ___________ activity.
A. Operating
B. Financing
C. Investing
D. None of them
Question # 11. Accumulated depreciation is a;
A. Contra asset account
B. Contra revenue account
C. Expense account
D. Equity account
Question # 12. Sources used in business are termed as;
A. Assets
B. Capital
C. Cash
D. Liabilities
Question # 13. Resources used for sources of business are called;
A. Obligation of firms
B. Assets of firms
C. Capital
D. Stakeholders
Question # 14. Balance sheet of Kareem son’s showed inventory balance of 70,000 on 31st march. During
April they purchased inventory for 80,000. On may 1st, inventory ledger had a normal balance
of 50,000. C.G.S in April is;
A. 100,000
B. 200,000
C. 60,000
D. 40,000
Question # 15. Kafeel sold goods to Rasheed for 7,000. Actual cost of goods sold was 3,000 and other
expenses were 1,000. Kafeel is supposed to pay 5% taxes on his revenue. His total profit is;
A. 2650
B. 3350
C. 4000
D. 3000
Question # 16. Kafeel sold goods to Rasheed for 7,000. Actual cost of goods sold was 3,000 and other
expenses were 1,000. Kafeel is supposed to pay 5% taxes on his revenue. His gross profit is;
A. 4000
B. 3000
C. 2650
D. 3350
Question # 17. Kafeel sold goods to Rasheed for 7,000. Actual cost of goods sold was 3,000 and other
expenses were 1,000. Kafeel is supposed to pay 5% taxes on his revenue. His EBIT is;
A. 3000
B. 4000
C. 2650
D. 3350
Question # 18. Kafeel sold goods to Rasheed for 7,000. Actual cost of goods sold was 3,000 and other
expenses were 1,000. Kafeel is supposed to pay 5% taxes on his revenue. His operating profit
is;
A. 3000
B. 4000
C. 4350
D. 3350
Question # 19. Kafeel sold goods to Rasheed for 7,000. Actual cost of goods sold was 3,000 and other
expenses were 1,000. Kafeel is supposed to pay 5% taxes on his revenue. His disposable
income is;
A. 2650
B. 3350
C. 4350
D. 6000
Question # 20. Kafeel sold goods to Rasheed for 7,000. Actual cost of goods sold was 3,000 and other
expenses were 1,000. Kafeel is supposed to pay 5% taxes on his revenue. His total expenses
are;
A. 4350
B. 3350
C. 2650
D. 3000
Question # 21. Kafeel sold goods to Rasheed for 7,000. Actual cost of goods sold was 3,000 and other
expenses were 1,000. Kafeel is supposed to pay 5% taxes on his revenue. His tax payable is;
A. 350
B. 200
C. 180
D. 250
Question # 22. Debit memoranda issued by bank are __________ from our ledger book.
A. Subtracted
B. Added
C. Not recorded
D. Deals only with bank statement
Question # 23. Credit memoranda issued by bank are __________ from our ledger book.
A. Added
B. subtracted
C. Multiplied
D. Ignored
Question # 24. Money deposited in Bank but not included in recent bank statement is ________.
A. Deposit in transit
B. Errors
C. Debit Memorandum
D. Credit Memoranda
Question # 25. A firm has employed total capital of 500,000 and its total assets are worth 1,500,000. Its
liabilities should be;
A. 1 million
B. 100,000
C. 10 million
D. 0.5 million
Question # 26. Cheque issued to customer but not reached/cleared from bank will be treated as;
A. Outstanding cheque
B. NSF cheque
C. NFS cheque
D. Credit Memorandum
Question # 27. Cash discount is an ________ account.
A. Contra revenue
B. Asset
C. Expenses
D. Revenue
Question # 28. Cash discount; given, decreases our;
A. All of them
B. Assets
C. Profit
D. Revenue
Question # 29. Cash discount; received, decreases our;
A. Expenses
B. Assets
C. Liabilities
D. Capital
Question # 30. Under perpetual inventory system, we generally record C.G.S when we actually _______
goods.
A. Sell
B. Buy
C. Deliver
D. Receive
Question # 31. Aslam generated Rs. 10,000 in revenue and received 3,000 in cash, for the rest of amount
he received a cheque with immediate effect. Total amount recorded in his cash flow for this
activity will be;
A. 10,000
B. 3000
C. 7000
D. None of them
Question # 32. Prepaid rent is classified as;
A. Assets
B. Liability
C. Expense
D. Equity
Question # 33. Un-earned revenue is a/an;
A. Liability
B. Resource
C. Source
D. Capital
Question # 34. A firm has 5000 in its current liabilities, 7,000 in long term liabilities and owner’s equity is
23000. The firm’s asset should be;
A. 35,000
B. 11,000
C. 12,000
D. 30,000
Question # 35. A firm has 5000 in its current liabilities, 7,000 in long term liabilities and owner’s equity is
23000. The firm’s total sources should equal;
A. 35,000
B. 11,000
C. 12,000
D. 30,000
Question # 36. A firm has 5000 in its current liabilities, 7,000 in long term liabilities and owner’s equity is
23000. The firm’s total obligations are;
A. 35,000
B. 11,000
C. 12,000
D. 30,000
Question # 37. A firm has 5000 in its current liabilities, 7,000 in long term liabilities and owner’s equity is
23000. Liabilities of owner of firm are;
A. 12,000
B. 35,000
C. 23,000
D. 7,000
Question # 38. Accounting equation can also be written as;
A. All of them
B. Resources owned equals claims of firm
C. Assets equal liabilities and equity
D. Capital equals assets minus liabilities
Question # 39. At end of May, Jan’s capital was 500. She further invested 200 and earned 700 as profit in
June. During this month she withdrew 400. What is her capital at beginning of July?
A. 1000
B. 500
C. 1400
D. 200
Question # 40. Cash in an organization is classified as;
A. Asset
B. Source
C. Revenue
D. Income
Question # 41. Drawings usually decrease capital. So, in owner’s equity statement we ______ drawings
from net investments by owner.
A. Subtract
B. Add
C. Multiply
D. Take the percentage
Question # 42. Decrease in price/value of a long term asset is classified as _________ in accounting.
A. Depreciation expense
B. Reduction in price
C. Market value
D. Book value
Question # 43. ________ is referred to as the book of original entry.
A. Journal
B. General ledger
C. T-Accounts
D. Transaction summary
Question # 44. ________ contains the record of individual accounts.
A. Ledger
B. Journals
C. General journal
D. Transaction record
Question # 45. A business is 60% debt financed. If the capital if the business is 6000. Liabilities of business
will be;
A. 9000
B. 3600
C. 15000
D. 12000
Question # 46. Bill received in June but paid in July, should be recognized and recorded in;
A. June
B. July
C. When cash is paid
D. Shouldn’t be recorded at all
Question # 47. Anwer owes you 23000 at the end of month and agrees to pay you this amount with 10%
interest. How much amount would you get at maturity date?
A. 25300
B. 2300
C. 20700
D. 23000
Question # 48. You receive a electricity bill for 600 with penalty of 10% if paid later than due date. How
much would you pay if you pay the bill within time?
A. 6 00
B. 60
C. 660
D. 666
Question # 49. You receive a electricity bill for 600 with penalty of 10% if paid later than due date. How
much would you pay if you pay after due date?
A. 660
B. 666
C. 600
D. 60
Question # 50. You receive a electricity bill for 600 with penalty of 10% if paid later than due date. How
much you would pay extra if you delayed the payment?
A. 60
B. 666
C. 660
D. 600
Question # 51. Accumulated Depreciation and Allowance for Doubtful Accounts are ____________
A. Contra-Asset Accounts
B. Asset Accounts
C. Liability Accounts
D. Equity Accounts
Question # 52. _____________ Compares Bank Statement with Depositors cash book records.
A. Bank Reconciliation Statement
B. Consolidated Statement
C. Accounting Equation
D. None of the given options
Question # 53. Which Account is not closed for the next year.
A. Cash
B. Sales
C. Drawing
D. Purchases
Question # 54. _____________ is/are temporary account(s)
A. All of the given options
B. Drawing
C. Revenue
D. Expense
Question # 55. A transaction that appears on both the debit and credit sides of the account is called a
___________
A. Contra Entry
B. Single Entry
C. Double Entry
D. Invalid Transaction
Question # 56. XYZ Co. bought furniture of PKR 30,000 in 2013. The company is using straight line
method for depreciation at 10%, with zero scrape value. The estimate of depreciation
expense for one year is:
A. PKR 3000
B. PKR 2000
C. PKR 8000
D. PKR 300
Question # 57. Salvage value is another name of ____________.
A. Residual Value
B. Market Value
C. Current Value
D. Depreciation
Question # 58. Another name of Diminishing Balance Method is __________.
A. Fixed Percentage Method
B. Straight Line Method
C. Sum of year Digit Method
D. Production Hours Method
Question # 59. Which Account is not included in the Cash Book?
A. Purchases
B. Discount Allowed
C. Discount Received
D. Bank
Question # 60. Cost – Accumulated Depreciation = ____________
A. Book Value
B. Historical Value
C. Depreciation Expense
D. None of the given options
Question # 61. Depletion unit method is applied for depreciation on ___________.
A. Natural Resources
B. Intangible Assets
C. Tangible Plant Assets
D. None of the given options
Question # 62. Bank Overdraft means:
A. Bank Account has negative balance
B. Bank Account has more than expected balance
C. Bank Account has zero balance
D. None of the given Options
Question # 63. To close the drawing account, we have to ____________ in the closing entry.
A. Credit
B. Debit
C. Ignore
D. Add it in Capital account
Question # 64. In the double declining Balance method, ___________ will be doubled of diminishing
balance method for calculating the depreciation.
A. Percentage
B. Cost
C. Amount
D. Salvage Value
Question # 65. A Three Column Cash book comprises of total ___________ ACOUNTS technically.
A. Four
B. seven
C. Six
D. Two
Question # 66. Prepaid Rent is:
A. An asset
B. An expense
C. A revenue
D. A liability
Question # 67. All Direct Expenses collectively called as ______________
A. Cost of Goods Sold
B. Income Statement
C. Balance Sheet
D. Statement of Cash Flow
Question # 68. Revenue – Cost of goods Sold = __________
A. Gross Profit / Gross Loss
B. Net Profit / Net Loss
C. Residual Value
D. Book Value
Question # 69. LIFO stands for __________.
A. Last In First Out
B. Last In Full Out
C. Late In First Out
D. Last Integrated Financial Output
Question # 70. FIFO stands for ___________.
A. First In First Out
B. Freight In Freight Out
C. First In Full Out
D. Full In Full Out
Question # 71. When goods are sold on credit, Credit terms are used, such as 2/10, n/20 which we
read as ___________ .
A. Two Ten, Net Twenty
B. Two Divided by Ten, N divided by Twenty
C. Two Slash Ten, N Slash Twenty
D. Two By Ten, N By Twenty
Question # 72. The three-column cash book consists of Cash, Bank and an additional
____________ at each side.
A. Discount Accounts
B. Drawing Account
C. Account Receivable
D. Purchases
Question # 73. When Balance of Bank Account is negative or Overdraft, it is shown on the ___________
side(s) of Bank Account
A. Credit
B. Debit
C. Both
D. None of the given Options
Question # 74. The word Petty is derived from the French word _________ which means small.
A. Petit
B. Pity
C. Penny
D. None of the given Options
Question # 75. Another name for Bank Statement is __________.
A. Pass Book
B. Cash Book
C. Bank Reconciliation
D. None of the given Options
Question # 76. Cheques received recorded by the depositor in the cash book by not included in bank
statement are called _________
A. Uncredited Cheques
B. Dishonored Cheques
C. Unpresented Cheques
D. None of the given Options
Question # 77. Cheques issued for payment by the firm that have not yet presented to its bank for
payment ___________.
A. Unpresented Cheques
B. Uncleared Cheques
C. Dishonored Cheques
D. Bearer Cheques
Question # 78. NSF stands for
A. Not Sufficient Fund
B. Not Sufficient Findings
C. Not Sufficient Finance
D. Not Sufficient Flow
Question # 79. Another name for Outstanding Cheques is _________.
A. Unpresented Cheques
B. Uncleared Cheques
C. Uncredited Cheques
D. Bearer Cheques
Question # 80. All asset and liability accounts, as well as the owner's capital account, are considered to
be _____________.
A. Real Accounts
B. Nominal Accounts
C. Temporary Accounts
D. All of the given Options
Question # 81. ____________ have balances that continue into the next fiscal period.
A. Real Accounts
B. Nominal Accounts
C. Temporary Accounts
D. None of the given Options
Question # 82. Bank, Trucks, and Accounts Payable are the examples of ___________.
A. Real Accounts
B. Nominal Accounts
C. Temporary Accounts
D. None of the given Options
Question # 83. ___________ (Revenue, Expense, and Drawings) have balances that do not continue into
the next fiscal period.
A. Nominal Accounts
B. Real Accounts
C. Temporary Accounts
D. None of the given Options
Question # 84. Nominal accounts (Revenue, Expenses and Drawing), with the exception of the
Drawings account, are related to the ____________.
A. Income Statement
B. Balance Sheet
C. Statement of Retained Earning
D. Cash Flow Statement
Question # 85. All ______________ begin each fiscal period with a nil balance.
A. Nominal Accounts
B. Real Accounts
C. Temporary Accounts
D. None of the given Options
Question # 86. The determination of Net Profit or Net Loss take place in _____________.
A. Income Statement
B. Balance Sheet
C. Statement of Retained Earning
D. Cash Flow Statement
Question # 87. Real Accounts are also called __________.
A. Permanent Accounts
B. Fixed Accounts
C. Tangible Accounts
D. None of the given Options
Question # 88. When we are closing all expenses accounts, we __________ all expenses.
A. Credited
B. Debited
C. Ignore
D. None of the given Options
Question # 89. ______________ is the contra account of Capital.
A. Drawing
B. Investment
C. Cash
D. Dividend
Question # 90. A Ten Column Worksheet consist of: _____________, Adjustments, Adjusted Trial
Balance, Income Statement and Balance Sheet.
A. Trial Balance
B. Closing Entries
C. Cash Book
D. Cash Flow Statement
Question # 91. An Eight Column Worksheet consist of: Trial Balance, Income Statement and Balance
Sheet.
A. Adjusted Trial Balance
B. Closing Entries
C. Adjustments
D. Cash Flow Statement
Question # 92. In a Ten Column worksheet, we pass adjusting entries in the column of ______________
A. Adjustments
B. Adjusted Trial Balance
C. Trial Balance
D. Income Statement
Question # 93. Another name for Reducing Balance Method is ___________.
A. Declining Balance Method
B. Straight Line Method
C. Double Declining Balance Method
D. Depletion Unit Method
Question # 94. When we pass journal entry of depreciation, we credited ____________
A. Accumulated Depreciation
B. Depreciation Expense Account
C. Bad Debt Expense Account
D. None of the given Options
Question # 95. When the life of Machine is estimated in Hours, we use __________ for depreciation.
A. Machine Hours Method
B. Units of Output Method
C. Straight Line Method
D. Depletion Method
Question # 96. When the life of Machine is estimated in production of units, we use __________ for
depreciation.
A. Units of Output Method
B. Machine Hours Method
C. Straight Line Method
D. Depletion Method
Question # 97. Cash is a __________
A. Current Asset
B. Fixed Asset
C. Intangible Asset
D. None of the given Options
Question # 98. To close the Purchases Account, we have to ____________ in the closing entry.
A. Credit
B. Debit
C. Ignore
D. Transfer it to Balance Sheet
Question # 99. To close the Sales Account, we have to ____________ in the closing entry.
A. Debit
B. Credit
C. Ignore
D. Add it with Sales Return account
Question # 100. Merchandise Inventory Beginning is shown in the __________ in final Accounts
A. Income Statement
B. Balance Sheet
C. Statement of Retained Earning
D. None of the given Options
