...... system of recording transactions in books is not a scientific one.

(i) Si
ngle Entry, (ii) Doubly Entry
a.
b.
c.
d.

Only (i)
Only (ii)
Either (i) or (ii)
Both (i) and (ii)

Ans - a
.............................................
Sales - Rs. 110000, Gross profit - Rs. 35000, Net loss - Rs. 7500. Find Operatin
g expenses.
a.
b.
c.
d.

27500
42500
68500
75000

Ans - b
.............................................
In LIFO method of inventory valuation
a.
b.
c.
d.

Issue of stocks to production is at latest price

Closing stock is at latest price
Both a & b
Neither a nor b

Ans - a
.............................................
Prior Period income should be ...... (i) inclusive determination of current prof
its, (ii) excluded for determination of current profits, (iii) shown in P&L a/c
of the current year
a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - b
.............................................
Accounting principles are generally not based on ...... (i) Imagination, (ii) Su
bjectivity, (iii) Practicability
a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - a
.............................................
Under the money measurement concept the following will not be recorded in the bo
oks of account of the business ...... (i) Value of furniture, (ii) Quality of co
mpany goods, (iii) Bad health of managing director
a. Only (i) and (ii)

b. Only (i) and (iii)

c. Only (ii) and (iii)
d. (i), (ii) and (iii)
Ans - c
.............................................
What does the 'Three Column Cash Book' record? (i) Cash transactions, (ii) Bank
transactions, (iii) Discounts
a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - d
.............................................
Compliance of accounting standards is not the duty of ...... (i) Board of Direct
ors, (ii) Auditor, (iii) Company secretary
a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - c
.............................................
Point out the correct accounting equation ...... (i) capital = assets-liabilitie
s, (ii) assets = capital+liabilities, (iii) liabilities = assets+capital
a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - a
.............................................
Purchase of a T.V set for the proprietor will not ...... (i) decrease assets and
decrease capital, (ii) increase assets and decrease capital, (iii) increase cap
ital and decrease assets
a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - c
.............................................
In India, accounting standards are issued by the ...... under the Council of the
Institute of Chartered Accountants of India. (i) RBI, (ii) Accounting Standards
Board
a.
b.
c.
d.

Only (i)
Only (ii)
Either (i) or (ii)
Both (i) and (ii)

Ans - b
.............................................
Cash discount is ...... (i) The allowance to expedite cash
within a specified period, (ii) It is a loss for the firm
and again for the firm making the payment, (iii) Discount
debit side and discount earned on the credit side of cash
a.
b.
c.
d.

Only
Only
Only
(i),

receipts and payments

receiving the payment
allowed is entered on
book.

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - d
.............................................
The following convention/s do not consider the qualities and disqualities of gen
eral manager ...... (i) convention of conservatism, (ii) convention of feasibili
ty, (iii) convention of materiality
a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - c
.............................................
The sale of business asset on credit is recorded in ...... (i) Sales journal , (
ii) General journal
a.
b.
c.
d.

Only (i)
Only (ii)
Either (i) or (ii)
Both (i) and (ii)

Ans - b
.............................................
Calculate sales if cost of sales is Rs 1,60,000 and the gross loss is Rs 68,000.
a.
b.
c.
d.

Rs
Rs
Rs
RS

2,28,000
92,000
2,52,00
1,42,000

Ans - b
.............................................
Luca De Bargo, an Italian monk in Venice gave birth to the modern concept of ...
... (i) accounts, (ii) bookkeeping
a.
b.
c.
d.

Only (i)
Only (ii)
Either (i) or (ii)
Both (i) and (ii)

Ans - d
.............................................

The concept of conservatism does not take into account ...... (i) all future los
ses but leaves all future profits, (ii) all future profits but leaves all future
losses, (iii) all future profits and all future lossed
a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - d
.............................................
The concern concept according to which a fact or happening which cannot be expre
ssed in terms of money is not recorded in the accounting books is called ......
a.
b.
c.
d.

cost concept
matching concept
realisation concept
money measurement concept

Ans - d
.............................................
Find out net profit from the following figures. Cash sale = Rs. 70,000, Credit s
ales = Rs. 80,000, Cost of goods = Rs. 1,04,000 Selling expenses = Rs. 13,400
a.
b.
c.
d.

Rs
Rs
Rs
RS

34,000
24,000
32,600
46,000

Ans - c
.............................................
Profit represents excess of receipts over expenditure. This statement is not as
per ...... (i) mercantile system of accounting, (ii) cash system of accounting,
(iii) hybrid system of accounting
a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - b
.............................................
What will be the capital of the proprietor if his/her assets are Rs. 1,90,00 and
liabilities Rs. 1,25,000
a.
b.
c.
d.

Rs
Rs
RS
Rs

55,000
65,000
75,000
1,90,000

Ans - b
.............................................
Income and expenses are recognized as and when they are due irrespective of thei
r actual receipt payment. This statement is not as per ...... (i) mercantile sys
tem of accounting, (ii) cash system of accounting, (iii) hybrid system of accoun
ting

a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - c
.............................................
What is not a Nominal Account? (i) An account of each person or firm with whom t
he trader deals, (ii) An account of each head of expense or source of income, (i
ii) An account of each property or possession dealt in by the trader in his busi
ness
a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - b
.............................................
Fundamental rule of debit and credit with regard to assets or real accounts is n
ot ...... (i) Debit what comes in and credit what goes out, (ii) Debit the recei
ver and credit the giver, (iii) Debit expenses and losses and credit gains
a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - c
.............................................
Point out the incorrect accounting equation ...... (i) capital = Assets+Liabilit
ies, (ii) Assets = Capital+liabilities, (iii) Assets = Capital-liabilities
a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - b
.............................................
Freight expenses for moving new machinery to factory is
a.
b.
c.
d.

Revenue expenses
Deferred revenue expenditure
Capital expenditure
None of the above

Ans - c
.............................................
In ...... method of accounting, profit represents excess of receipts over expend
iture. (i) Mercantile, (ii) Cash
a. Only (i)
b. Only (ii)

c. Either (i) or (ii)

d. Both (i) and (ii)
Ans - b
.............................................
In double entry bookkeeping, entry is not balanced with a corresponding ...... e
ntry. (i) Reverse entry, (ii) Adjusting entry, (iii) Contra entry
a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - a
.............................................
What is a Ledger?
a.
at
b.
c.
d.

A book, where all transactions relating to a particular account are recorded

one place.
A book where only cash transactions are recorded.
A book where all business transactions are recorded daily.
None of the above.

Ans - a
.............................................
Calculate gross income from the following information sales Rs 2,00,000 sales Rs
4,000 opening stock Rs 20,000 purchases 1,20,000 purchase returns 2,000 wages 1
4,000 freight 6,000 salaries 40,000 closing stock 24,000
a.
b.
c.
d.

Rs
Rs
Rs
Rs

60,000
78,000
1,34,000
62,000

Ans - d
.............................................
Revenue is said to be realized ......
a.
b.
c.
d.

when
when
when
when

sales are made

goods are manufactured
order is received
cash is received

Ans - a
.............................................
The convention of conservation is applicable ......
a.
b.
c.
d.

In
In
In
In

providing for depreciation

providing for discount on debtors
providing for discount on debtors
making provision for bad and doubtful debts

Ans - d
.............................................
Which of the following statement/s are true? (i) The accounting principle follow

ed
he
rm
ed

for financial accounting are not applicable for management accounting, (ii) t
selection of a specific accounting policy is left to the discretion of the fi
concerned, (iii) according to AS 4 contingency profits should not be recogniz
in financial statement

a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - c
.............................................
The concept of conversations when applied to Balance sheet results in ......
a.
b.
c.
d.

Under statement of assets

Over statement of liabilities
Under statement of liability
Over statement of assets

Ans - d
.............................................
In accordance with the going concern concept in accounting, a business is consid
ered as having a/an ...... (i) definite life, (ii) indefinite life
a.
b.
c.
d.

Only (i)
Only (ii)
Neither (i) nor (ii)
Both (i) and (ii)

Ans - b
.............................................
Which of the following will not affect Trial Balance
a.
b.
c.
d.

Goods sold on credit not recorded in books.

Overstating of sales register.
Rent account credited instead of debit.
Salary debited to the extent the amount.

Ans - a
.............................................
The amount brought in by the proprietor in the business should not be credited t
o ...... (i) Proprietor's account, (ii) Drawings account, (iii) Capital account
a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - a
.............................................
Wages paid to Raju should not be debited to...... (i) Raju's account, (ii) Wages
account, (iii) Cash account
a. Only (i) and (ii)
b. Only (i) and (iii)

c. Only (ii) and (iii)

d. (i), (ii) and (iii)
Ans - b
.............................................
According to the concept of going concern, a business is presumed to have ......
a.
b.
c.
d.

a limited life
a long life
a definite life
an indefinite life

Ans - b
.............................................
Realisation concept implies realisation of revenue at ......
a.
b.
c.
d.

the
the
the
the

receipt of the order

delivery of goods
receipt of cash from the customer
cancellation of an order

Ans - b
.............................................
Calculate -(a) cost of goods sold (b) gross profit and (c) net profit from the f
ollowing figures opening Rs 40,000 purchases Rs 2,00,000 purchases returns Rs 20
,000 direct expenses Rs 30,000 closing stock Rs 20,000 indirect expenses RS 20,0
00 sales Rs 2,50,000 sales returns 10,000
a.
b.
c.
d.

Rs
Rs
Rs
Rs

2, 30,000 Rs 10,000 Rs 5,000

2,30,000 Rs 5,000: Rs 10,000
2,30,000 Rs 10,000 (-) Rs 10,000
2,10,000 Rs 10,000 Rs 5,000

Ans - c
.............................................
Recording business transactions on the basis of documents is to observe the acco
unting assumption of ......
a.
b.
c.
d.

Accounting equity
Going concern
Money ,measurement
Verifiable objective

Ans - d
.............................................
Treatment of capital as liability observes the accounting assumption of
a.
b.
c.
d.

business
Revenue realization
full disclosure
historical cost principle

Ans - a
.............................................
In case of a bad debt, the amount should not be debited to...... (i) Bad debt ac

count, (ii) Customer account, (iii) Discount account

a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - c
.............................................
Ledger is a book of ...... entry. (i) Original, (ii) Final
a.
b.
c.
d.

Only (i)
Only (ii)
Neither (i) nor (ii)
Both (i) and (ii)

Ans - b
.............................................
In ...... system of accounting, incomes and expenses are recognised as and when
they are due irrespective of their actual receipt/payment. (i) Mercantile, (ii)
Cash
a.
b.
c.
d.

Only (i)
Only (ii)
Either (i) or (ii)
Both (i) and (ii)

Ans - a
.............................................
Compliance with accounting standard is the duty of the ...... (i) Company, (ii)
Auditor
a.
b.
c.
d.

Only (i)
Only (ii)
Either (i) or (ii)
Both (i) and (ii)

Ans - b
.............................................
Which of the following statement/s are false? (i) matching concept requires that
revenue should always be equal to the expenditure, (ii) the mercantile system o
f accounting is acceptable only for trader, (iii) hybrid system of accounting is
not permitted as per income tax law in India
a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - a
.............................................
Sales during the year is Rs 1,00,000, gross profits is 25% on cost. Find out the
amount of gross profit.
a. Rs 20,000
b. Rs 25,000

c. Rs 30,000
d. Rs 35,000
Ans - a
.............................................
In ...... method of accounting, profit represents excess of receipts over expend
iture. (i) Mercantile, (ii) Cash
a.
b.
c.
d.

Only (i)
Only (ii)
Either (i) or (ii)
Both (i) and (ii)

Ans - b
.............................................
The practice of appendintg neptes regarding contingent liabilities in accounting
statements is in pursuance to ......
a.
b.
c.
d.

Convention
Convention
Concept of
Concept of

of disclosure
of conservatism
money measurement
money

Ans - a
.............................................
How do profits made from normal operations retained in business appear in the ba
lance sheet? (i) Capital, (ii) Reserves, (iii) Surplus
a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - d
.............................................
The credit balance in the 'Capital Account' is not a/an ...... (i) Liability, (i
i) Asset, (iii) Revenue
a.
b.
c.
d.

Only
Only
Only
(i),

(i) and (ii)

(i) and (iii)
(ii) and (iii)
(ii) and (iii)

Ans - c
.............................................
Consignee's Account is a......
a.
b.
c.
d.

Real Account
Personal Account
Representative Personal Account
Nominal Account

Ans - b
.............................................

Assets kept for short term for converting into cash or for resale are called as.
.....
a.
b.
c.
d.

Operating Assets
Fixed Assets
Current Assets
Liquid assets

Ans - c
.............................................