Core :24191A MCQ – Principles of Accounting
BCom Accounting and Finance
1. Long term assets without any physical existence but, possessing a value are called
A) Intangible assets
B) Fixed assets
C) Current assets
D) Investments
2. The assets that can be easily converted into cash within a short period, i.e., 1 year or less are
known as
A) Current assets
B) Fixed assets
C) Intangible assets
D) Investments
3. _______ is the process of recording financial transactions pertaining to a business.
Accounting
Management
Marketing
Economics
4. The financial statements used in accounting are a concise summary of _____over an
accounting period.
Financial transactions
Productions
Operations
Sales
5. ___is a necessary function for decision making, cost planning, and measurement of economic
performance measurement.
Accounting
Journals
Ledger
Cash book
6. ____three branches of accounting
Financial, cost and management
Financial, cost and marketing
Financial, cost and operational
Financial, operational and management
7. All financial transactions that occur during an accounting period are summarized into
____,____ and _____
Balance sheet, fund flow statement and trading and profit and loss account.
The balance sheet, income or P&L statement, and cash flow statement.
Income statement, BRS, Sales account
Balance sheet, Income statement and sales ledger
8. _____ is considered "The Father of Accounting and Bookkeeping
Luca Pacioli
Luca abey
Luca Persio
Luca Pero
9. Accounting equation is
Assets = liabilities + capital
Assets = capital + current liabilities
Assets = liabilities + cash flows
Assets = liabilities + current assets
10. Liabilities are ____ of the organization
Obligations
Resources
Income
Profits earned
11. Consignment A/C is prepared in the books of___________
Consignor
Consignee
Transporter
Insurer
12. The consignment accounting is made on ________ basis
Cash basis
Matching basis
Realization basis
Accrual basis
13. Liabilities are
Loans
Debentures
Outstanding expenses
All
14. The main purpose of balance sheet is to know the ____
Financial position
Income level
Capital framework
All
15. Office expenses includes
Stationery
Interest received
Commission received
Dividend
16. Financial expenses
Commission received
Interest paid
Salaries
Rent paid
17. Which concept states that “for every debit, there is a credit”?
Money Measurement Concept
Accounting Period Concept
Separate Entity Concept
Dual Aspect Concept
18. Every debit has an equal and corresponding ____
Increase in debit
Credit
Both a and b
None
19. Example of real account
Asset a/c
Rent a/c
Salaries a/c
All
20. Nominal account example
Asset a/c
Rent a/c
Rajesh a/c
None
21. Rules for personal account
Debit the receiver and credit the giver
Credit the receiver and debit the giver
Both the above
None
22. ______ works as the basis for accounting information
Classification
Book keeping
Recording
Journalizing
23. ____________ is the first step in accounting
Journal
Book keeping
Recording
Classification
24. Joint venture account is a
Nominal Account
Personal Account
Real Account
25. _______ begins where _____ end
Accounting, Book keeping
Accounting, operations
Book keeping, Accounting
Book keeping, operations
26.___ is the excess of revenue of a business over its costs
Loss
Profit
Revenue
Income
27. ____ is the amount invested in an enterprise by its owners
Assets
Capital
Profits
Retained earnings
28. Goods in hand at the end of a year are called ___________.
Purchases
Cost
Stock
Profit
29. This concept assumes that, for accounting purposes, the business enterprise and its owners
are two separate independent entities
Business entity concept
Money measurement concept
Going concern concept
Accounting period concept
30. The goods drawn from business for owner’s personal use are called ___________.
Capital
Drawings
Stock
Profit
31. This concept assumes that all business transactions must be in terms of money that is in the
currency of a country
Business entity concept
Money measurement concept
Going concern concept
Accounting period concept
32. This concept states that a business firm will continue to carry on its activities for an indefinite
period of time
Accounting period concept
Money measurement concept
Going concern concept
None
33. The cost concept states that all fixed assets are recorded in the books of accounts at their
___________ price
Market price
Cost price
Cost or market price whichever is less
All
34. The parties to joint venture are called
Co-venturers
Partners
Principal and agent
Friends
35. Accrual concept relates to the determination of...................
Income
Assets
Debts
None
36. The ____ states that the revenue and the expenses incurred to earn the revenues must belong
to the same accounting period
Matching concept
Accounting period concept
Going concern concept
Money measurement concept
37. The convention of ______ means that same accounting principles should be used for
preparing financial statements year after year
Convention of full disclosure
Convention of consistency
Convention of materiality
Convention of conservatism.
38. __________________requires that all material and relevant facts concerning financial
statements should be fully disclosed
Convention of full disclosure
Convention of consistency
Convention of materiality
Convention of conservatism.
39. The convention of........ states that, to make financial statements meaningful, only material
facts i.e. important and relevant information should be supplied to the users of accounting
information.
Convention of full disclosure
Convention of consistency
Convention of materiality
Convention of conservatism.
40. This convention is based on the principle that “Anticipate no profit, but provide for all
possible losses”.
Convention of full disclosure
Convention of consistency
Convention of materiality
Convention of conservatism.
41. Increase in assets is
Debit
Credit
Income
Gains
42. Increase in Expenses/Losses is _____, and decrease in Expenses/Losses is _______.”
Debited, credited
Credited, debited,
Debited, debited
Credited, credited
43.“Increase in Liabilities is _____ and decrease in Liabilities is ______
Credited, debited
Debited, credited
Credited, credited
Debited, debited
44. ________ is the equated date on which a single payment of a consolidated amount can be
made in lieu of several payments due on different dates
Debit date
Median due date
Average due date
Over due date
45. Practical use of average due date
Settlement of running accounts between traders and customers
Settlement of transactions between a principal and agent
Settling a series of bills of exchange
All
46. Prepaid expenses and accrued incomes are
Asset
Liability
Increase in liability
Decrease in asset
47. Salaries outstanding is a
Liability
Asset
Income
Capital expenditure
48. Unpaid amount by a debtor is ___
Credit
Bad debts
Rebate
Discount given
49. Joint Venture is
Nominal Account
Personal Account
Memorandum Account
Real Account
50. The explanation for journal entry is
Recording
Ledger
Narration
Statements
51. _____ is a list in which are indicated the various items that cause a difference between the
bank balance as per cash book and pass book on any given date.
Statement of cash flow
Bank reconciliation statement
Ledger statements
Pass book entries
52. Causes for difference in bank balance as per cash book and pass book are -
Cheques issued but not presented
Cheques deposited but not collected
Dividend debited in cash book more than once in error
All
53. Subsidiary books
Purchase book
Sales book
Bills receivable book
All
54. The accounting process includes _______,_____ and ____
summarizing, analyzing and reporting
Writing, entering and journalizing
Maintaining records, branding and marketing
Writing, branding and branding
55. Which of the following is the correct sequence of the accounting cycle:
Journal > Trial balance > Ledger > Transaction Analysis
Transaction Analysis > Journal > Ledger > Trial Balance
Purchases > Journal > Ledger > Trial Balance
56. A trial balance prepared after taking into account the effect of adjusting entries is known as:
Financial trial balance
Adjusted trial balance
Unadjusted trial balance
Normal trial balance
57. When unsold stock is taken away by a co-venturer, then account is debited:
Joint Stock
Joint Venture
Joint e Bank Account
Co – venturers capital account
58. Memorandum joint venture account is prepared:
When each co-venturer keeps records of their own joint venture transaction
When separate set of books is maintained
When each co-venturer keeps record of all the transactions himself
59. What is the person writing out the order to pay called?
Drawee
Acceptor
Payee
Drawer
60. In the same country, which bill can be written and accepted?
Inland bill
Foreign bill
Accommodation bill
Trade bill
61. Provider’s a/c are found in the
General Ledger
Purchases Ledger
Nominal record
Sales Ledge
62. A proforma invoice is sent by:
Consignee to consignor
Consignor to consignee
Debtors to consignee
Debtors to consignor
63. Commission provided by the consignor to the consignee to cover bad debt is known as
Ordinary commission
Del credere Commission
Over-riding commission
Special commission.
64. Over-riding commission is calculated on:
Cash sales
Credit sales only
Sales at higher price
Credit sales less cash sales.
65. Bank reconciliation statement is prepared by
The bank
The bank customer
The auditor
All of the above
66. Credit balance in Bank pass book means
Bank overdraft.
Bank Balance.
Balance as per Cash book.
Total of Bank A/c.
67. Bank Reconciliation statement is
Combined cash bank book.
Statement showing negative balance of bank account
A statement showing the analysis for difference between the balances of cash book and pass
book.
A summary of all bank transactions
68. Which of the following is a disadvantage of the financial statements.
The ability to tell if a business would be able to pay the debts
Determining the sources and use of cash in the organization
Chance of manipulation in the report for obtaining debt that the organization cannot
payback
A yearly report that the investors can refer to
69. Which of the following can be a part of financial reports?
The report regarding the financial result of the organization
The report with details about the financial position of the organization
The report regarding the flow of cash of the organization
All of the above
70. What are the limitations of the financial statements
There can be subjective interpretations of the financial statements as per the investors
There may be manipulation done in the financial statements such that the real profit-loss of the
organization is not shown to the investors
The financial statements give a detailed description of the cash flow of the organization
Both A and B
