MCQs on Journal Entries

1. Which of the following transactions requires a journal entry?

a) Goods sold on cash
b) Salary paid in advance
c) Goods taken by the owner for personal use
d) Both (b) and (c)
2. What is the journal entry for recording bad debts written off?
a) Bad Debts A/c Dr. To Debtors A/c
b) Debtors A/c Dr. To Bad Debts A/c
c) Bad Debts A/c Dr. To Cash A/c
d) No entry required
3. If a company purchases machinery and pays installation
charges separately, the installation charges should be:
a) Debited to Machinery A/c
b) Treated as an expense
c) Recorded in Repair & Maintenance A/c
d) Ignored
4. Which account is credited when a cheque received from a
debtor is dishonored?
a) Bank A/c
b) Cash A/c
c) Debtor’s A/c
d) Bills Payable A/c
5. Goods given as charity should be credited to which account?
a) Purchases A/c
b) Sales A/c
c) Charity A/c
d) Capital A/c
6. If a company receives ₹5,000 as commission in advance, the
correct journal entry is:
a) Commission Received A/c Dr. To Commission A/c
b) Cash A/c Dr. To Commission Received in Advance A/c
c) Cash A/c Dr. To Commission Received A/c
d) No entry required
7. If a company pays ₹2,000 for advertisement and it is wrongly
recorded as purchases, which adjustment is required?
a) Debit Purchases A/c and Credit Advertisement A/c
b) Debit Advertisement A/c and Credit Purchases A/c
c) Debit Cash A/c and Credit Advertisement A/c
d) No adjustment required
8. What is the journal entry for interest accrued but not received?
a) Interest A/c Dr. To Accrued Interest A/c
b) Accrued Interest A/c Dr. To Interest A/c
c) Interest A/c Dr. To Cash A/c
d) No entry required
9. Which of the following is a real account?
a) Capital A/c
b) Bank A/c
c) Salary A/c
d) Commission A/c
10. If goods worth ₹10,000 are lost in transit and insurance
claims ₹8,000, the entry will include:
a) Loss by Transit A/c Dr. To Goods A/c
b) Loss by Transit A/c Dr. To Insurance A/c
c) Insurance Claim Receivable A/c Dr. Loss by Transit A/c Dr. To
Purchases A/c
d) No entry required
11. Goods worth ₹5,000 taken by the owner for personal use
should be adjusted in:
a) Drawings A/c
b) Purchases A/c
c) Capital A/c
d) Sales A/c
12. Prepaid rent is considered as:
a) Liability
b) Asset
c) Expense
d) Revenue
13. If a debtor pays ₹10,000 in cash but it is wrongly credited
to Sales A/c, which account should be debited for rectification?
a) Cash A/c
b) Sales A/c
c) Debtor’s A/c
d) No rectification needed
14. What is the correct journal entry for the proprietor
introducing personal cash into the business?
a) Cash A/c Dr. To Capital A/c
b) Capital A/c Dr. To Cash A/c
c) Bank A/c Dr. To Loan A/c
d) Cash A/c Dr. To Drawings A/c
15. A bill of exchange worth ₹25,000 was discounted with the
bank at ₹24,500. What is the correct journal entry?
a) Cash A/c Dr. Discount A/c Dr. To Bills Receivable A/c
b) Bank A/c Dr. To Discount A/c
c) Cash A/c Dr. To Bills Payable A/c
d) No entry required
16. If a cheque of ₹8,000 received from a debtor is
dishonored, the correct entry is:
a) Bank A/c Dr. To Debtors A/c
b) Debtors A/c Dr. To Bank A/c
c) Cash A/c Dr. To Debtors A/c
d) No entry required
17. Which account will be credited when depreciation is
charged?
a) Depreciation A/c
b) Fixed Asset A/c
c) Capital A/c
d) Bank A/c
18. The purchase of a car for office use should be recorded
as:
a) Vehicle Expense
b) Capital Expenditure
c) Revenue Expenditure
d) None of the above
19. What will be the journal entry for a cheque issued but not
yet presented?
a) No entry required
b) Bank A/c Dr. To Cash A/c
c) Cash A/c Dr. To Bank A/c
d) Cheques in Hand A/c Dr. To Bank A/c
20. Which entry is required when an asset is sold at a profit?
a) Cash A/c Dr. To Fixed Asset A/c
b) Cash A/c Dr. To Profit on Sale of Asset A/c
c) Profit on Sale of Asset A/c Dr. To Fixed Asset A/c
d) No entry required
1. A company received ₹20,000 from a debtor, but instead of
recording it in the cash book, it was directly credited to the
Sales Account.
2. Goods worth ₹12,000 were sent to a customer on approval
basis. The customer accepted goods worth ₹7,000 and
returned the rest.
3. The proprietor introduced ₹50,000 cash and a personal laptop
worth ₹30,000 into the business.
4. Paid ₹5,000 as an advance salary to an employee, but it was
recorded as salary expense.
5. A bank overdraft of ₹10,000 was settled by issuing a cheque of
₹9,500, and the bank waived the remaining amount.
6. Goods worth ₹8,000 were lost in transit. Insurance company
approved a claim of ₹6,500 but has not yet paid.
7. Company paid ₹4,000 as commission to an agent, but it was
wrongly recorded as brokerage expense.
8. Purchased a building for ₹3,00,000 and paid ₹20,000 as legal
fees, wrongly recorded as an expense.
9. A customer deposited ₹25,000 directly into the company’s
bank account, but the accountant failed to record it.
10. A bill of exchange of ₹15,000 was discounted with the
bank at ₹14,500, but the drawee later dishonored it.
11. Accrued interest of ₹4,000 was recorded as interest
received in cash.
12. Purchased raw materials worth ₹18,000, but due to a
clerical error, it was recorded in the books as ₹81,000.
13. An electricity bill of ₹2,000 was paid through a personal
bank account of the proprietor.
14. A debtor of ₹10,000 became insolvent and could only pay
40% of the amount. The remaining was treated as bad debt.
15. A post-dated cheque of ₹6,000 was received from a
customer, but it was recorded as cash received in the books.