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AGA KHAN UNIVERSITY EXAMINATION BOARD

HIGHER SECONDARY SCHOOL CERTIFICATE
CLASS XI EXAMINATION
SEPTEMBER 2011
Principles of Accounting Paper I
Time allowed: 40 minutes

Marks 30

INSTRUCTIONS
1. Read each question carefully.
2. Answer the questions on the separate answer sheet provided. DO NOT write your answers on the
question paper.
3. There are 100 answer numbers on the answer sheet. Use answer numbers 1 to 30 only.
4. In each question there are four choices A, B, C, D. Choose ONE. On the answer grid black out
the box for your choice with a pencil as shown below.

Correct Way
A B C D

Incorrect Way
A B C D

A B C D

A B C D

A B C D

5. If you want to change your answer, ERASE the first answer completely with a rubber, before
blacking out a new box.
6. DO NOT write anything in the answer grid. The computer only records what is in the boxes.
7. You may use a scientific calculator if you wish.
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1.

The system of accounting in which income and expenditure are recognised even if cash is not
paid but goods and services are provided, is called
A.
B.
C.
D.

2.

Which of the following is a correct statement?

A.
B.
C.
D.

3.

Assets + liabilities = equities.

Assets liabilities = equities.
Assets = liabilities equities.
Assets = liabilities = equities.

The type of transaction in which every debit has its corresponding credit is termed as
A.
B.
C.
D.

7.

general journal.
accounting cycle.
trial balance.
worksheet.

Which of the following is the correct accounting equation?

A.
B.
C.
D.

6.

recording.
posting.
balancing.
footing.

The rotation of accounting procedure in a specific accounting period is

A.
B.
C.
D.

5.

Mathematical accuracy of accounts is verified by an income statement.

Revenue account shows debit balance.
Transaction recorded in chronological order is called journalizing.
Sales discount is given on cash sales.

The process of transferring data from general journal to general ledger is termed as
A.
B.
C.
D.

4.

accrual basis system.

mixed system.
cash basis system.
barter system.

double entry.
single entry.
book keeping.
cash book.

Which of the following is correct?

A.
B.
C.
D.

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Increase in asset will be recorded as credit

Increase in liability will be recorded as debit
Increase in capital will be recorded as debit
Increase in expense will be recorded as debit

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8.

If goods are sold at a higher rate than the expenses incurred on its sales, then the difference
between the amount is known as
A.
B.
C.
D.

9.

Which of the following is an example of a capital expenditure?

A.
B.
C.
D.

10.

to be collected.
to be paid.
not collected.
fully paid.

The statement prepared to measure the accuracy of debit and credit is recorded in
A.
B.
C.
D.

14.

creditors appearing in a creditors ledger.

debtors appearing in a debtors ledger.
assets and liabilities accounts.
all accounts appearing in the general ledger.

The debit balance of account receivable in a general ledger means an amount which is
A.
B.
C.
D.

13.

non-operational expenditure.
revenue expenditure.
capital expenditure.
personal expenses.

A trial balance is a list of balances of

A.
B.
C.
D.

12.

Cleaning the carpet in a reception area

Tune-up charges for a company truck
Replacing an engine in a company car
Replacing burned-out light bulbs in the factory

Staff salaries of Rs.5,000 for the year will be recorded as

A.
B.
C.
D.

11.

liability.
profit.
expense.
loss.

a general journal.
a cash book.
a trial balance.
an income statement.

Credit purchases are recorded in a

A.
B.
C.
D.

sales journal.
purchase journal.
sales return journal.
purchase return journal.

PLEASE TURN OVER THE PAGE

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15.

The initial cash investment in a business will be recorded as

A.
B.
C.
D.
16.

transactions about business assets.

information about profit/loss.
information about profit/loss and balance sheet.
information about balance sheet.

The realization principle indicates that revenue should usually be recognized and recorded in
the accounting records
A.
B.
C.
D.

21.

bank balance.
over draft.
cash in hand.
petty cash balance.

Worksheet is a columnar sheet which shows all

A.
B.
C.
D.

20.

debit balance of cash book.

debit balance of bank statement.
debit balance of petty cash book.
credit balance of bank statement.

Debit balance of the bank column in the cash book shows

A.
B.
C.
D.

19.

cash book shows more balance than the bank statement.

cash book shows less balance than the bank statement.
cash book and bank statement shows equal balance.
balance of both cash book and bank statement remain unchanged.

Unfavourable balance of bank statement means

A.
B.
C.
D.

18.

Credit
capital
cash
capital
drawing

The bank statement of an enterprise shows the bank charges deducted. On such a deduction
the
A.
B.
C.
D.

17.

Debit
cash
capital
drawing
cash

at the end of the accounting period.

when cash is collected from the customers.
when goods are sold or services are rendered to customers.
only when the revenue can be matched by an equal amount of expenses.

For preparing a balance sheet, accrued expenses are shown as a part of

A.
B.
C.
D.

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capital expenditure.
current assets.
non current (fixed) assets.
current liability.

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22.

Closing stock is accounted in

A.
B.
C.
D.

23.

Carriage inward should be reflected in a

A.
B.
C.
D.

24.

trading account.
profit and loss account.
balance sheet.
profit and loss account and a balance sheet.

Which of the following accounts is debited while making an adjusting entry of merchandise
inventory ending?
A.
B.
C.
D.

25.

balance sheet only.

notes to the accounts.
balance sheet and trading account both.
profit and loss account only.

Closing stock
Trading account
Purchase account
Sales account

At the year end, the net income of Delo & Company is Rs.80,000. However, the following
adjustments are necessary:
Office supplies used, Rs.1,500;
Services performed for clients but not yet recorded or collected, Rs.2,500;
Interest accrued on note payable to bank, Rs.4,500.
After adjusting entries are made for those items, Delo & Companys net income would be
A.
B.
C.
D.

26.

Allowance for bad debts is debited when

A.
B.
C.
D.

27.

Rs.76,500.
Rs.81,000.
Rs.83,500.
Rs.88,500.

a customer's account is written off.

cash is received from the customer.
liabilities decrease.
assets increase.

A bill of exchange contains

A.
B.
C.
D.

an unconditional order.
a promise.
a request to deliver goods.
a receipt

PLEASE TURN OVER THE PAGE

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28.

'Negotiable instrument' means

A.
B.
C.
D.

29.

In which of the following conditions will promissory notes payable be issued?

A.
B.
C.
D.

30.

transferable financial document.

conditional financial document.
confidential financial document.
non-transferable financial document.

Payment of loan
Clearing liabilities
Sales of asset
Sales of goods

In which of the following conditions will promissory notes receivables be issued?

A.
B.
C.
D.

Issuance of loans
Clearing liabilities
Sales of assets
Purchase of assets

END OF PAPER
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