1. The basic function of Financial Accounting is to

find out gross profit only

find out net profit only

record all the transactions only

record, classify and summarize the business transactions in a significant and systematic manner

2. Sales Book is meant for recording

all sales

all credit sales

all cash sales

credit sales of merchandise only

3. Business includes

Trade and Aids to trade

Trade only

Industry and Commerce

Industry and Aids to trade

4. Prepaid Insurance is

again

a loss

an asset

a liability

5. The balance of Petty Cash Book is

an income

an expense

an asset

a liability

6. Purchases made on credit not recorded would affect

Purchases A/c and Suppliers A/c

Sales A/c

Purchases A/c

Suspense A/c

7. Returns Outwards Book is kept to record

return of anything purchased

return of goods purchased

return of goods sold

credit purchase of goods

8. Commission outstanding account is

a Real A/c

a Personal A/c

a Nominal A/c

Both Real and Nominal A/cs

9. Which of the following will not be shown in the Balance Sheet

Creditors

Goodwill

Contingent liability

Cash

10. RS 500 paid to Anil as wages should be debited to

Wages A/c

Cash A/c

Anil's A/c

Suspense A/c

11. Which of the following is a Real Account?

Loan A/c

Machine A/c

Drawings A/c

Ram's A/c

12. Patents appear on

the debit side of Profit and Loss A/c

the credit side of Profit and Loss A/c

the assets side of Balance Sheet

the liabilities side of Balance Sheet

13. Which of the following will not be included in Balance Sheet?

Opening stock

Closing stock

Debtors

Creditors

14. Postage and Telegram is charged to

Manufacturing A/c

Drawings A/c

Trading A/c

Profit and Loss A/c

15. Profit on sale of an asset will be recorded in

Trading A/c

Profit and Loss A/c

Suspense A/c

Balance Sheet

16. Donation received for a specific purpose is to be taken as

Capital receipts

Revenue receipts

Capital expenditure

Revenue expenditure

17. The final step of accounting cycle is

Trial Balance

Balance Sheet

Ledger

Journal

18. Real Accounts relate to

Incomes only

Expenses only

Losses only

Assets only

19. Amount realized on account of goods sold is called

Gain

Profit

Revenue

Equity

20. Which of the following transactions leads to contra entry in the Cash Book?

Received rent RS 1,000

Goods purchased from Anil for cash RS 2,000

Amount paid to Mohan RS 5,000

Withdrawal of RS 10,000 from the bank

21. Narration is written

while classifying the transactions

for every transaction recorded in the Journal

at the time of preparing Trial Balance

while preparing Balance Sheet

22. Bank overdraft is a

fixed asset

short term liability

current asset

long term liability

23. A copy of customer's account given by the bank is called

Pass Book

Cash Book

Cheque Book

Purchase Book

24. Expenses incurred during the regular course of business are called

Capital expenditure

Revenue expenditure

Revenue loss

Deferred revenue expenditure

25. A system of advancing a fixed amount to the petty cashier periodically is called

Single entry system

Double entry system

Imprest system

Temporary advance system

26. Bank Reconciliation Statement is prepared by

Bank

Auditors

Debtors

Customers of the bank

27. Carriage outwards will be recorded in

Profit and Loss A/c

Trading A/c

Suspense A/c

Drawings A/c

28. Current liabilities do not include

dividend payable

short term loan

outstanding expenses

debentures

29. Sales Tax collected is a

contingent liability

fixed liability

current liability

current asset

30. The main objective of preparing the 'Journal' is

to record business transactions

to make posting in Ledger

to journalise the cash transactions

to ascertain gross profit only

31. Cash given away as charity shall be debited to

Cash A/c

Charity A/c

Sales A/c

Purchases A/c

32. Bad debts recovered will be shown in

Trading A/c

Manufacturing A/c

the liabilities side of Balance Sheet

Profit and Loss A/c

33. A contra entry appears on both the sides of

Purchases Book

Sales Book

Cash Book

Balance Sheet

34. Which of the following equations is correct?

Assets =Capital Liabilities

Assets =Capital -Liabilities

Assets =Liabilities -Capital

Assets Capital/Liabilities

35. What will be the effect of rent paid on accounting equation?

Cash will decrease

Cash will increase

Capital will decrease

Cash and capital both will decrease

36. Which of the following accounts has debit balance?

Income

Asset

Liability

Outstanding expenses

37. Premium received on issue of debentures is an example of

Capital profit

Current asset

Fixed asset

Revenue profit

38. Cost of goods sold is

Opening stock Closing stock

Opening stock -Closing stock

Opening stock x Closing stock

Opening stock Purchases Direct expenses -Closing stock

39. Manufacturing Account is prepared to find out

Cost of goods sold

Total cost

Net profit/Net loss

Cost of goods produced

40. Depreciation of fixed assets is treated as

Revenue expenditure

Deferred revenue expenditure

Capital expenditure

Capital loss

41. Trading Account is prepared to find out

Cost of goods sold

Cost of production

Net profit/Net loss

Gross profit/Gross loss

42. 'Income received in advance' will be shown in Balance Sheet as

Current assets

Current liabilities

Fixed assets

Long term liabilities

43. The main objective of preparing a Balance Sheet is to know about

Net profit of business

Arithmetical accuracy of accounting work

Financial position of the business

Cost of goods sold

44. A cheque payable at the counter of the bank without identification is called

Bearer cheque

Specific cheque

Order cheque

Crossed cheque

45. 'Salaries and Wages' are shown on the

Debit side of Trading A/c

Credit side of Trading A/c

Debit side of Profit and Loss A/c

Assets side of Balance Sheet

46. Goodwill is a/an

Fictitious Asset

Fixed Asset

Intangible Asset

Tangible Asset

47. All direct expenses are shown in

Balance Sheet

Capital A/c

Trading A/c

Profit and Loss A/c

48. Which of the following items is a liquid asset?

Machinery

Land and Building

Loose Tools

Bank Balance

49. 'Interest on drawings' is shown on the

Debit side of Trading A/c

Credit side of Trading A/c

Debit side of Profit and Loss A/c

Credit side of Profit and Loss A/c

50. 'Accrued income' shown in Trial Balance will be shown in

Balance Sheet

Trading A/c

Manufacturing A/c

Profit and Loss A/c