Multiple Choice Questions:Set 2

New attempt Set 2of multiple choice questions.(Answers to all the multiple choice questions
are given in Appendix 2 at the end of this book)
Each of these multiple choice has four suggested answers,(A),(B),(C),an (D).You should read
each question and then decide which choice is th best,either (A) or (B) or (C) or (D).Write
down your answers on a separate piece of paper.You will then be able to redo the set of
questions later without having to try to ignore your answers fom previous attempts.

MC21 Gross profit is

(A) Excess of sales over cost of goods sold
(B) Sales less purchases
(C) Cost of goods sold + opening inventory
(D) Net profit less expenses of the period
MC22 Net profit is calculated in the
(A) Trading account
(B) Profit and loss account
(C) Trial balance
(D) Statement of financial position
MC23 To find the value of closing inventory at the end of a period we
(A) Do this by physically counting he inventory(i.e stocktaking)
(B) Looking the inventory account
(C) Deduct opening inventory from cost of goods sold
(D) Deduct cost of goods sold from sales
MC24 The credit entry for net profit is on the credit side
(A) The trading account
(B) The profit and loss account
(C) The drawing account
(D) The capital account
MC25 Which of these best describes a statement of financial position?
(A) An account providing the books balance
(B) A record of closing entries
(C) A listing of balances
(D) A statement of assets
MC26 The descending order in which current assets should be shown in the statement of
financial position is
(A) Inventory, Accounts receivable, Bank, Cash
(B) Cash, Bank, Accounts receivable, Inventory
(C) Account receivable, Inventory, Bank, Cash
(D) Inventory, Accounts receivable, Cash, Bank
MC27 Which of these best describes non-current assets?
(A) Items bought to be used in the business
(B) Items which will not wear out quickly
(C) Expensive items bought for the business
(D) Items having a long life and not bought specifically for resale
MC28 Carriage inwards is charged to the trading account because
(A) It is an expense connected with buying goods
(B) It should not go in the statement of financial position
(C) It is not part of motor expenses
(D) Carriage outwards goes in the profit and loss account
MC29 Given figures showing: Sales 8200, Opening Inventory 1300, Closing Inventory
900, Purchases 6400, Carriage inwards 200, the cost of goods sold figure is
(A) 6800
(B) 6200
(C) 7000
(D) Another figure
MC30 The costs of putting goods into a saleable condition should be charged to
(A) The trading account
(B) The profit and loss account
(C) The statement of financial position
(D) None of these
MC31 Suppliers personal accounts are found in the
(A) Nominal ledger
(B) General ledger
(C) Purchases ledger
(D) Sales ledger
MC32 The sales day book is best describeds as
(A) Part of the double entry system
(B) Containing customers accounts
(C) Containing real accounts
(D) A list of credit sales
MC33 Which of the following are personal account?
(i) Buildings
(ii) Wages
(iii) Account receivable
(iv) Account payable
(A) (i) and (iv) only
(B) (ii) and (iii) only
(C) (iii) and (iv) only
(D) (ii) and (iv) only
MC34 When Lee makes out a cheque for 50 and sends it to Young, then Lee is known as
(A) The payee
(B) The banker
(C) The drawer
(D) The creditor
MC35 If you want to make sure that your money will be safe if cheques sent are lost in the
post, you should
(A) Not use the postal service
(B) Always pay by cash
(C) Always take the money in person
(D) Cross your cheque Account Payee only, Not Negotiable
MC36 When depositing money in your current account you should always use
(A) A cheque book
(B) A paying-in slip
(C) A cash book
(D) A general ledger
MC37 A debit balance of 100 in a cash account shows that
(A) A cheque book
(B) Cash has been overspent by 100
(C) 100 was the total of cash paid out
(D) The total of cash received was less than 100
MC38 50 cash taken from the cash till and banked is entered
(A) Debit cash column 50 Credit bank column 50
(B) Debit bank column 50 Credit cash column 50
(C) Debit cash column 50 Credit cash column
(D) Debit bank column 50 Credit bank column 50
MC39 A credit balance of 200 on the cash columns of the cash book would mean
(A) We have spent 200 more than we have received
(B) We have 200 cash in hand
(C) The bookkeeper has made a mistake
(D) Someone has stolen 200 cash
MC40 Posting the transactions in bookkeeping means
(A) Making the first entry of a double entry transactions
(B) Entering items in a cash book
(C) Making the second entry of a double entry transactions
(D) Something other than the above