1. The primary function of accounting is to record

Economic data

All types of data

Business transactions

Only profit

2. Which of the following will not be recorded in the books of accounts

Machinery purchased

Quality of goods

Discount allowed

Discount received

3. The amount brought in by the owner of business is credited to

Cash account

Bank account

Drawings account

Capital account

4. Goods returned by a customer should be debited to

Customer account

Sales returns account

Cash account

Sales account

5. Commerce is related to

Production

Distribution only

Trade and Aids to Trade

Distribution and Consumption

6. The cash discount allowed to a debtor is credited to

Discount account

Customer's account

Sales account

Purchases account

7. Goods withdrawn by the owner for the personal use should be debited to

Drawings account

Purchases account

Capital account

Sales account

8. Which of the following is not a personal account?

Salary prepaid account

Proprietor's account

Salary outstanding account

Patent account

9. The concession given by the seller to buyer on the list price at the time of sale is called

Commission

Cash discount

Trade discount

Expenditure

10. Persons who supply the goods and services on credit are called

Investors

Creditors

Debtors

Lenders

11. Ledger is a principal book of entries in which

Only personal accounts are opened

Only real and personal accounts are opened

All types of accounts are opened

No accounts are opened

12. In case of bad debts the bad debt amount should be debited to

Debtor's account

Discount allowed account

Bad debts account

Creditor's account

13. The debit balance of personal account shows

Cash in hand

Cash at bank

Amount receivable

Amount payable

14. Which of the following statements is correct?

The process of recording a transaction is called posting.

All the transactions are recorded in personal accounts.

Journal is a book of original entry.

All of the above

15. The debit balance of real accounts implies that

they are assets accounts

they are liabilities accounts

it is the amount payable by the firm

All of the above

16. Which of the following statements is false?

Posting is required in personal accounts for trade discount.

Compound entry is posted to more than two accounts.

No narration is written while posting into ledger.

All of the above

17. The debit balance of nominal accounts reflects

Gains/Incomes

Net profit

Gross profit

ExpensesILosses

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

Deposited RS 2,000 in a Bank.

Received RS 1,000 from Mohan.

Goods sold for Cash to Buresh RS 5,000.

Goods purchased for Cash from Meera RS 1,000.

19. Profit and Loss account is prepared by transferring the balances of

Nominal accounts only

Real accounts only

Personal accounts only

Real and Personal accounts

20. Sales book is meant for recording

All types of sales

All cash sales

Credit sales of goods only

Cash sales of goods only

21. The balance of petty cash book is

an expense

an income

an asset

a liability

22. Bank reconciliation statement is prepared by

a Business firm

a Bank

a Debtor

a Creditor

23. Bills receivable book is

a book of recording customers' invoices

a subsidiary book

three column cash book

details of debtors

24. A bill of exchange

has three parties

is drawn on a bank

cannot be discounted

All of the above

25. Profits which are not earned in the regular course of business operations are called

Capital receipts

Revenue receipts

Capital profits

Revenue profits

26. An error not disclosed by the trial balance is usually

an error of principle

an error of complete omission

an error of commission

All of the above

27. Gross profit is ascertained by preparing

Trading account

Manufacturing account

Profit and Loss account

Balance Sheet

28. Bank overdraft is a

Fixed asset

Current asset

Long-tenn liability

Short-term liability

29. Balance Sheet discloses

Cash position of a business

Financial position of a business

Profit earning capacity of a business

Yearly working of a business

30. If closing stock is given in trial balance, it will be shown in final accounts as

debited to trading account

credited to trading account

shown on the assets side of balance sheet

shown on the liabilities side of balance sheet

31. Carriage inwards is not charged to

Trading account .

Manufacturing account

Profit and Loss account

Goods account

32. Capital receipts are amounts received in the form of

additional capital brought by the owner

loans received

sale proceeds of fixed assets

All of the above

33. An example of a current liability is

Share capital

Long-term loans

Trade creditors

Fixed deposits

34. The assets which can be converted into cash easily are called

Fixed assets

Current assets

Intangible assets

Liquid assets

35. When a bank. refuses to make payment of a cheque presented to it, it is called

General crossing of a cheque

Special crossing of a cheque

Endotsement of a cheque

Dishonour of a cheque

36. Which of the following is a 'deferred revenue expenditure'?

Expenditure on formation of a company.

Depreciation on fixed assets

Expenditure incurred for buying goods for resale

Interest on loan for business

37. Amount paid to David posted on the credit side of his account would affect

David's account only

Cash account only

Purchases account and Cash account

Cash account and David's account

38. A bill is drawn on June 12 for two months. It becomes due on 15th August, which is a public holiday. The due date ofthe bill will be

15 August

16 August

14 August

13 August

39. When a buyer returns the goods to the supplier, a statement is sent to the buyer called

Bank note

Promissory note

Debit note

Credit note

40. Sales are equal to

Cost of goods sold -Profit

Cost of goods sold Gross profit

Gross profit -Cost of goods sold

Sales Purchases Profit

41. A firm allows a commission of on net profit to its sales manager before charging such commission. The net profits are RS 21,000. The amount ofcommission will be

RS 1,000

RS 1,050

RS 1,100

RS 1,200

42. The assets and liabilities of a firm are Cash RS 4,000; Stock RS 36,000; Debtors RS 54,200; Bills receivable RS 12,600; Furniture RS 28,000; Creditors RS 42,000 and Rent outstanding RS 3,700. What will be the amount of capital

RS 89,100

RS 92,000

RS 1,34,000

RS 1,81,000

43. Capital of was RS 50,000 on 1-1-2013. He put further capital of RS 6,000 on 1-10-2013. Interest on capital upto 31-12-2013 will be

RS 2,575

RS 2,750

RS 2,800

RS 2,625

44. Sundry debtors are RS 50,000, bad debts are RS 1,500, provision for discount is RS 2,180. The net sundry debtors amount shown in the Balance Sheet will be

RS 46,320

RS 51,500

RS 45,150

RS 58,530

45. Goodwill is

Tangible asset

Fixed asset

Liquid asset

Intangible asset

46. Which of the following statements is true?

A bill of exchange is a bill given to a customer for purchasing goods.

A cheque is a bill of exchange drawn on a bank.

A bill of exchange has three parties.

All of the above

47. Which of the following is a revenue expenditure?

RS 1,000 spent on repair of machinery

RS 25,000 spent on issue of shares

RS 5,00,000 spent on building construction

All of the above

48. Adjustment entries given outside the trial balance are recorded

in Profit and Loss account only

both in Balance Sheet and Profit and Loss account

in Balance Sheet only

in Trading account only

49. Balance Sheet shows the

balances of personal accounts only

balances of personal accounts and real accounts

balances of personal accounts and nominal accounts

balances of nominal accounts and real accounts

50. According to which concept are the owner and his business two separate entities?

Money measurement concept

Cost concept

Business entity concept

Objective evidence concept