QN1. Choose the right answer (Part A and B Question) from among the following:
A. Purchase book is used to record:
a. Credit purchase of goods
b. Cash purchase of goods
c. Both credit and cash purchase of goods
d. Credit purchase of goods including assets
Ans: a. Credit purchase of goods
B. When goods are returned to the supplier:
a. An invoice is raised
b. A debit note is raised and sent to the supplier
c. A credit note is raised and sent to the supplier
d. Information is sent through letter/email
Ans: b. A debit note is raised and sent to the supplier
QN2. Only credit purchases are entered in the purchase book and credit sales in the cash book
a. True
b. False
Ans: False
QN3. The bills payable book consists of all promissory notes or bills of exchange accepted by the business in respect of amounts owing to its —–.
a. price
b. customer
c. place
d. None of these
Ans: b. customer
QN4. In which book of original entry would the following transactions be entered?
a. Goods sold for cash were returned by a customer:—–.
b. Goods sold on credit were returned by a customer and cash was given immediately:—–.
c. Goods bought from Prakash & Co. the payment for which is due after a month: —–.
a. (a) cash book (b) sales return book and cash book (c) Purchase book
b. (a) customer book (b) Ledger (c) Credit
c. (a) purchase order (b) Cash book (c) Credit
Ans: (a) cash book (b) sales return book and cash book (c) Purchase book
QN5. —– records all receipts and payments in cash.
a. ledger
b. Cashbook
c. balance sheet
d. None of these
Ans: Cashbook
QN6. Choose the right option: —– encourages prompt payment.
(a) Cash discount (b) trade discount (c) credit discount (d) None of these
Ans: (a) Cash discount
QN7. The amount which the main cashier gives to the petty cashier to meet the petty or small cash expenses for a given period is known as —– cash book.
a. Credit
b. Ledger
c. Imprest
d. None of these
Ans: Imprest
QN8. Under the non-imprest system the chief cashier may hand over cash to the petty cashier the amount —– spent by the petty cashier.
a. equal to or more than or less than the amount
b. No amount
c. Netral amount
d. More amount
Ans: equal to or more than or less than the amount
QN9. —– ledger will have separate accounts for each customer and it will show the transactions entered into with the customers.
a. general
b. creditor’s
c. debtor’s
d. None of these
Ans: debtor’s
QN10. —– ledger will have a separate account for each supplier and it will show the transactions entered into with the suppliers.
a. general
b. creditor’s
c. debtor’s
d. None of these
Ans: creditor’s
QN11. Final accounts are the summaries of ledger accounts organized in such a manner as to show the profit or loss of the business for the accounting year.
a. True
b. False
Ans: True
QN12. To determine the —–, income statement or trading and profit and loss a/c is prepared.
a. price
b. customer count
c. Profit or loss
d. None of these
Ans: Profit or loss
QN13. —– means that information is available to decision-makers in time to be capable of influencing their decisions.
a. price
b. customer
c. Timeliness
d. None of these
Ans: Timeliness
QN14. —– in final accounts simply means bringing into the record all those items which have not been included in the trial balance.
a. price
b. customer
c. Adjustments
d. None of these
Ans: Adjustments
QN15. The provision made for meeting the loss arising on account of the discount that will have to be allowed to the debtors is known as—–.
a. Provision for discount on debtors
b. Provision for discount on creditors
c. No any discount
d. None of these
Ans: Provision for discount on debtors
QN16. Persons who owe us money are called “creditors”.
a. True
b. False
Ans: False
QN17. The basic principle of a closing entry is that the account to be closed should be credited if it has a debit balance and the account to which it is transferred should be debited.
a. True
b. False
Ans: True
QN18. For closing the sales returns account —– account should be debited and —- account should be credited.
a. Sales and sales returns
b. saving and customer
c. current and personnel
d. None of these
Ans: Sales and sales returns
QN19. For closing sales Account, the entry will be —–.
a. Sales Account should be debited and Trading Account should be credited
b. Sales Account should be credited and Trading Account should be debited
c. None of these
Ans: Sales Account should be debited and Trading Account should be credited.
QN20. Trading account is prepared to find out the Gross profit or Gross loss of the organization.
a. True
b. False
Ans: True
QN21. Opening stock is shown on the —– side of the Trading Account.
a. Debit
b. credit
c. customer
d. None of these
Ans: Debit
QN22. Trading account is prepared to find out —–.
a. Gross profit
b. Gross loss
c. revenue
d. None of these
Ans: Gross profit
QN23. Profit and loss account is prepared to calculate the net profit or net loss of the business.
a. True
b. False
Ans: True
QN24. —– account is prepared from nominal accounts and its balance is transferred to —–.
a. loss account; price
b. Profit and loss account; Capital account
c. current account; saving account
d. None of these
Ans: Profit and loss account; Capital account
QN25. Selling and distribution expenses are shown on the debit side of the —– account.
a. Profit and loss account
b. current ac
c. saving ac
d. None of these
Ans: Profit and loss account
QN26. —– is a statement prepared to measure the financial position of the business on a certain fixed date.
a. Balance sheet
b. ledger
c. bank ac
d. None of these
Ans: Balance sheet
QN27. —– are assets that are usually converted to cash within one year.
a. Current Assets
b. customer assets
c. Unknown assets
d. None of these
Ans: Current Assets
QN28. —– are those tangible assets with a useful life greater than one year.
a. Current Assets
b. Customer assets
c. Fixed assets
d. None of these
Ans: Fixed assets
QN29. —– given outside the trial balance has the two-fold effect to complete a double-entry system.
a. Price
b. Customer
c. Adjustments
d. None of these
Ans: Adjustments
QN30. If any expense has been incurred, but not paid during the period should be adjusted by creating —– for unpaid expenses.
a. Liabilities
b. Asset
c. no due
d. None of these
Ans: Liabilities
QN31. —– on the asset should be deducted from the asset.
a. Depreciation
b. Appreciation
c. Value
d. None of these
Ans: Depreciation
QN32. Interest on capital is added to the capital on the Asset side of the Balance sheet.
a. True
b. False
Ans: True
QN33. Office furniture is shown on the —– side of the Balance sheet.
a. Depreciation
b. Liability
c. Asset
d. None of these
Ans: Asset
QN34. State true or false:
a. If the debit side is more than the credit side, the balance is shown as By balance c/d on the credit side of its account and it indicates debit balance.
a. True
b. False
Ans: True
b. If the credit side is more than the debit side, the balance is shown as To balance c/d on the debit side and it indicates debit balance.
a. True
b. False
Ans: True
QN35. The customer’s account with the bank is called —–.
a. Bank Statement/Passbook
b. Ledger
c. ATM card
d. None of these
Ans: Bank Statement/Passbook
QN36. In the bank column of the cash, the cheques deposited are entered on the —– book.
a. Debit side
b. Credit side
c. Making side
d. None of these
Ans: Debit side
QN37. Bank Reconciliation statement is prepared to —– the bank balance as shown by the cash book and the bank statement.
a. Reconcile
b. customer
c. account
d. None of these
Ans: Reconcile
QN38. Cheques issued are posted on the —– side of the bank column of Cash Book.
a. Credit
b. Debit
c. asset
d. None of these
Ans: Credit
QN39. The credit column of the passbook should be equal to the —– column of the cash book and the debit column of the passbook should equal to the —– column of the cash book, if there are no differences.
a. Debit, Credit
b. Credit, Debit
c. Up, Down
d. None of these
Ans: Debit, Credit
QN40. Bank credits the firm’s account as soon as it receives cheques from the firm.
a. True
b. False
Ans: False
