Transaction, journal entry, source document, ledger account, trial balance.
Source document, transaction, ledger account, journal entry, trial balance.
Transaction, source document, journal entry, trial balance, ledger account.
Transaction, source document, journal entry, ledger account, trial balance.

Amount brought in by proprietor should be credited to

cash account
capital account
drawings account
creditors account

Which of the following is a real (permanent) account?

Goodwill
Sales
Accounts Receivable
Both Goodwill and Accounts Receivable

Which of the following errors will be disclosed in the preparation of a trial balance?

Recording transactions in the wrong account.
Duplication of a transaction in the accounting records.
Posting only the debit portion of a particular journal entry.
Recording the wrong amount for a transaction to both the account debited and the account credited.

Management Accounting provides invaluable services to management in performing

All management function
Interpret financial data
Controlling function
None of these

If closing stock appears in the trial balance, it should be

Credited to the trading account
Credited to the profit and loss account
Deducted from the purchases in the trading account
Shown on the liability side of the Balance sheet

Financial information should be neutral and bias free" is the dictation of which one of the following?

Completeness concept
Faithful representation Concept
Objectivity Concept
Duality Concept

Which of the following statements is not an objective of financial reporting?

Provide information that is useful in investment and credit decisions.
Provide information regarding policy of organization
Provide information that is useful in assessing cash flow prospective
None of theses

A company’s telephone bill consisting of a Rs.200 monthly base amount, plus long distance charges, would be classified as a:

Variable cost
Committed fixed cost
Direct cost
Semi variable cost

A book containing a chronological record of business transaction & original record

Journal
Ledger
Trial balance
None of these

Which of these items would be accounted for as an expense?

Repayment of bank Loan
Dividend to stock holders
The purchase of land
Payment of current period rent

The amount of salary paid to Suresh should be debited to

The account of Suresh
Salaries a/c
Cash a/c
Bank a/c

The cash discount allowed to a debtor should be credited to

Discount a/c
Customer a/c
Sales a/c
None of these

Accounting does not record non-financial transactions because of:

Accrual concept
Cost concept
Continuity concept
Money measurement concept

Accounting is the process of matching

Benefits & Costs
Revenues & Costs
Cash Inflow & Cash Outflow
Potential & Real Performance

The primary objective of cost accounting is

Ascertain the cost of goods and services
Ascertain the profit
Presentation of all data
None of these

Of the following account types, which would be increased by a debit?

Liabilities and expenses.
Assets and equity.
Assets and expenses.
Equity and revenues.

Which of the following statements about differences between financial and managerial accounting is incorrect?

Managerial accounting information is prepared primarily for external parties such as stockholders and creditors; financial accounting is directed at internal users.
Financial accounting is aggregated; managerial accounting is focused on products and departments.
Managerial accounting pertains to both past and future items; financial accounting focuses primarily on past transactions and events.
Financial accounting is based on generally accepted accounting practices; managerial accounting faces no similar constraining factors.

Custom and traditions which guide the accountant while preparing the accounting statements

Accounting convention
Accounting concepts
Accounting principles
None of these

Balance Sheet is a statement of

Assets
Liabilities
Capital
All of these

The convention of disclosure implies that all material information should be

Disclosed in the account
Disclosed in the accounts which is required to owner
Not disclosed
None of these

Outstanding salary is shown as:

An asset in the balance sheet
A liability
By adjusting it in the P & L a/c
Both b and c above

Proprietor (owner) is treated as creditor of business due to:

Periodicity concept
Materiality Principle
Entity Concept
Consistency concept

Which of the following is correct

Profit does not alter capital
Capital can only come from profit
Profit reduces capital
Profit increases capital

Interest , rent, electricity bill are types of account

Personal a/c
Impersonal a/c
Real a/c
Nominal a/c

Cost of asset should always be equal to the cost of the liabilities. This concept is

Double Entry Bookkeeping
Matching Concept
Consistency
Money measurement Concept

P& l a/c is prepared for a period of one year by following:

Consistency concept
Conservatism concept
Accounting period concept
Cost Concept

Prepaid expense is treated as

Current asset
Current liability
Short term liability
None of these

Which of the following is a liability?

Loan from Mr.Y
loan to Mr.y
Both (a) (b)
None of these

Advantages of cost accounting accrue:

Only to workers
Only to government
Only to consumers
To management, workers, consumers and government

Marginal costing is concerned with:

Fixed cost
Variable cost
Semi variable cost
None of the above

The books to be compulsorily maintained by a company are:

Cash book and ledger
Sales and purchase book
Journal
All of above

Which of the following best describes a trial balance?

It is a list of balances on the books
It is a special account
Shows the financial position of a business
Shows all the entries in the books

Which of the following equation is related with Dual Aspect Concept?

Total Assets = Total Liabilities
Total Assets = Capital + Outsider’s Liabilities
Capital = Total Assets - Outsider’s Liabilities
All of the above

The prime function of accounting is to

To record economic data
Provide the information basis of action
Classifying and recording business transaction
Attainment of economic goal

According to schedule VI Companies Act which item is not shown on Asset side of Balance sheet

Investment
Current Loan & Advances
Provision
Lease Holds

Salary paid to factory manager is an item of:

Prime cost
Factory overhead
Selling overhead
Office overhead

Carriage outward is charged to

Debit side Profit & Loss a/c
Debit side Trading a/c
Credit side of Profit & Loss a/c
Credit side of trading a/c

Payment received from Debtor

Decreases the Total Assets
Increases the Total Assets
Results in no change in the Total Assets
Increases the Total Liabilities

Which one of the following is not an example of Intangible Assets?

Patents
Trade Marks
Copyright
Land

Creating provision against fluctuation in the price of investment is application of accounting concept

Convention of conservatism
Convention of full disclosure
Convention of consistency
None of these

Debit what come in Credit what goes out rule for

Real a/c
Personal a/c
Nominal a/c
None of these

The following comments each relate to the recording of journal entries. Which statement is true?

For any given journal entry, debits must exceed credits.
It is customary to record credits on the left and debits on the right.
The chart of accounts reveals the amount to debit and credit to the affected accounts.
Journalization is the process of converting transactions and events into debit/credit format.

Going concern concept assumes

Business as a dissolving concern
Business on relishing values
Business as a going concern
Asset = liability

Management Accounting relates to

Recording of accounting data
Recording of cost data
Presentation of account data
None of the above

Which items does not come under the balance sheet

sales
Share capital
Reserves and surplus
Unsecured loan

Which of the following is not related with Money Measurement Concept ?

All business transaction should be expressed only in money
The transactions which cannot be expressed in money, will not be recorded in accounting books
Business is treated as separate from the proprietor
None of These

Depreciation is a charge against

Profit
Assets
Company
Books of A/c

Fixed assets and current assets are categorized as per concept of:

Separate entity
Going concern
Consistency
Time period

Management accounting is applicable to

Service entities
Manufacturing entities
Non profit entities
All of these

Insurance prepaid is shown as

Current assets
Current liabilities
Fixed asset
Fixed liability

Financial accounting is concerned with

Recording of business expenses and revenue
Recording of costs of products and services
Recording of day to day business transactions
None of the above

Goods given as samples should be credited to:

Advertisement account
Sales account
Purchase account
None of the above

Investment of X company profit in shares of other company PQR Pvt. ltd are recorded in

Asset side of Balance Sheet
Liability side of Balance Sheet
Profit & Loss a/c
Not recorded in Balance Sheet

Sales made to Mahesh for cash should be debited to

Cash account
Mahesh Account
Sales account
Purchase account

Income tax paid by a sole proprietor on his business income should be:

Debited to trading account
Debited to profit and loss account
Deducted from capital account in the balance sheet
None of the above

What comes in is to be debited, what goes out is to be credited.

Rules of Personal
Rules of Real
Rules of Nominal
All of these

Which of the following is not an example of real a/c:

Machinery
Building
Cash
Creditor

Purchases of goods on credit from A is recorded as:

Debit purchases a/c; credit cash a/c
Debit A a/c; credit purchases a/c
Debit purchases a/c; credit A a/c
Debit A a/c; credit stock a/c

The transferring of debit and credit items from journal to the respective accounts in the ledger is called as

Ledger
Posting
Forward journal
None of these

The following comments all relate to the recording process. Which of these statements is correct?

The general ledger is a chronological record of transactions.
The general ledger is posted from transactions recorded in the general journal.
The trial balance provides the primary source document for recording transactions into the general journal.
Transposition is the transfer of information from the general journal to the general ledger.