1st
Which of the following best defines accounting?
a) Recording transactions only
b) Recording, classifying, and summarising transactions
c) Preparing budgets only
d) Auditing accounts only
b) Recording, classifying, and summarising transactions
Double entry means:
a) Single aspect of transaction
b) Dual aspect of transaction
c) Triple aspect of transaction
d) Multiple aspect of transaction
b) Dual aspect of transaction
Each transaction affects two accounts — one debit, one credit.
The process of transferring entries from journal to ledger is called:
a) Casting
b) Journalising
c) Posting
d) Balancing
c) Posting
transferring entries from Journal to Ledger is called Posting.
Which type of account is ‘Salary Account’?
a) Real Account
b) Personal Account
c) Nominal Account
d) Capital Account
c) Nominal Account
Who among the following is an internal user of accounting information?
a) Creditors
b) Government
c) Managers
d) Tax authorities
c) Managers
they use info to plan, control and make decisions.
The first step in the accounting cycle is:
a) Preparation of trial balance
b) Posting to ledger
c) Journalising transactions
d) Preparation of final accounts
c) Journalising transactions
Every transaction is analyzed & recorded chronologically with debit & credit.
“Debit what comes in, credit what goes out” — relates to which account?
a) Personal Account
b) Real Account
c) Nominal Account
d) Mixed Account
b) Real Account
Relates to assets (cash, furniture, stock).
Which of the following is NOT a branch of accounting?
a) Financial Accounting
b) Cost Accounting
c) Management Accounting
d) Marketing Accounting
d) Marketing Accounting
refers to the application of accounting principles and analysis to marketing activities
Carriage inward is shown in:
a) Trading A/c
b) Profit & Loss A/c
c) Balance Sheet
d) Cash Book
a) Trading A/c
It’s a direct expense related to bringing goods to the business.
Which of these is NOT shown in a Balance Sheet?
a) Assets
b) Liabilities
c) Capital
d) Gross Profit
d) Gross Profit
The main objective of financial accounting is to:
a) Keep systematic records
b) Provide information to users
c) Ascertain profit or loss
d) All of the above
d) All of the above
Which of the following is a real account?
a) Cash Account
b) Capital Account
c) Rent Account
d) Interest Account
a) Cash Account
Net Profit is calculated in which account?
a) Trading Account
b) Cash Book
c) Profit & Loss Account
d) Balance Sheet
c) Profit & Loss Account
Depreciation is charged on:
a) Current Assets
b) Fixed Assets
c) Liabilities
d) Incomes
b) Fixed Assets
Depreciation is loss in value of fixed assets due to wear & tear.
Bookkeeping mainly involves:
a) Interpretation of data
b) Recording of financial transactions
c) Auditing of accounts
d) Analysis of financial statements
b) Recording of financial transactions
Bookkeeping is mainly about systematic recording of daily transactions.
Which of the following accounts is prepared to ascertain gross profit?
a) Trading Account
b) Profit & Loss Account
c) Balance Sheet
d) Cash Book
a) Trading Account
Trading Account is prepared to find out Gross Profit or Gross Loss.
Which principle assumes that all transactions are recorded in monetary terms?
a) Going Concern
b) Accrual
c) Money Measurement
d) Consistency
c) Money Measurement
Only transactions that can be measured in money are recorded.
A trial balance is prepared to:
a) Find profit or loss
b) Record transactions
c) Check arithmetical accuracy
d) Analyse cash flows
c) Check arithmetical accuracy
Trial Balance ensures debits = credits
Income received in advance is treated as:
a) Asset
b) Liability
c) Expense
d) Reserve
b) Liability
It’s not yet earned → obligation → liability.
Purchases Return is also known as:
a) Return Inward
b) Return Outward
c) Debit Note
d) Credit Note
b) Return Outward
Goods returned to suppliers → Purchases Return → Return Outward
Which of these is NOT a subsidiary book?
a) Purchases Book
b) Sales Book
c) Journal Proper
d) Ledger
d) Ledger
the "Ledger Book" is the primary or general ledger
Which of the following is NOT a function of accounting?
a) Recording transactions
b) Classifying transactions
c) Auditing financial statements
d) Summarising transactions
c) Auditing financial statements
it is an independent examination of accounts done by an auditor, not by an accountant.
Which of the following is a statement of financial position?
a) Trading Account
b) Profit & Loss Account
c) Balance Sheet
d) Cash Book
c) Balance Sheet
Which account is prepared to know indirect incomes & indirect expenses?
a) Trading A/c
b) Profit & Loss A/c
c) Balance Sheet
d) Journal
b) Profit & Loss A/c
All indirect costs & losses are debited and all indirect incomes & gains are credited. The net result shows Net Profit (if credit side > debit side) or Net Loss (if debit side > credit side).
Which accounting concept assumes that a business will continue for a long time?
a) Money Measurement Concept
b) Going Concern Concept
c) Cost Concept
d) Dual Aspect Concept
b) Going Concern Concept
Going Concern assumes business will not shut down soon