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MCQ Business Accounting

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24 views5 pages

MCQ Business Accounting

Uploaded by

mkariansami99
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© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Accountings

1. Which of the following statements is incorrect?

A. Assets — Capital — Liabilities


B. Liabilities + Capital — Assets
C. Liabilities + Assets = Capital
D. Assets — Liabilities = Capital

2. Which of the following is not an asset?

A. Buildings
B. Cash balance
C. Accounts receivable
D. Loan from K. Harris

3. Which of the following is a liability?

A. Machinery
B. Accounts payable for goods
C. Motor vehicles
D. Cash at bank

4. Which of the following best describes the meaning of ‘Purchases’?

A. Items bought
B. Goods bought on time
C. Goods bought for resale
D. Goods paid for

5. Which of the following is correct?

A. Profit does not alter capital


B. Profit reduces capital
C. Capital can only come from profit
D. Profit increases capital

6. Which of the following should not be called ‘Sales’?

A. Office fixtures sold


B. Goods sold on time
C. Goods sold for cash
D. Sale of an item previously included in ‘Purchases’
7. Given the following, what is the amount of Capital?

Assets: Premises £20,000; Inventory £8,500; Cash £100.


Liabilities: Accounts payable £3,000; Loan from A. Adams £4,000
A. £21,100
B. £21,600
C. £32,400
D. £21,400

8. What would have been the balance on the account of C. De Freitas in MC17 on 19 May 2017?

A. A debit balance of £265


B. A credit balance of £95
C. A credit balance of £445
D. A credit balance of £265

9. Which of the following best describes a trial balance?

A. It shows the financial position of a business


B. It is a special account
C. It shows all the entries in the books
D. It is a list of balances on the books

10. Is it true that the trial balance totals should agree?

A. No, there are sometimes good reasons why they differ


B. Yes, except where the trial balance is extracted at the year end
C. Yes, always
D. No, because it is not a statement of financial position

11. Carriage inwards is charged to the trading account because:

A. It is an expense connected with buying goods


B. It should not go in the balance sheet
C. It is not part of motor expenses
D. Carriage outwards goes in the profit and loss account

12. Given the following figures:

Sales £8,200, Opening inventory £1,300, Closing inventory £900, Purchases £6,400, Carriage inwards £200, the cost of
goods sold figure is:
A. £6,800
B. £6,200
C. £7,000
D. Another figure

13. A normal set of financial statements is prepared on the assumption that the business will continue trading
for the foreseeable future, with no intention nor any need to close down. What name is given to this
assumption?

A. Going concern
B. Prudence
C. Consistency
D. Perpetual succession

14. Suppliers’ personal accounts are found in the:

A. Nominal ledger
B. General ledger
C. Purchases ledger
D. Sales ledger

15. The sales day book is best described as:

A. Part of the double entry system


B. Containing customers’ accounts
C. Containing real accounts
D. A list of credit sales

16. Which of the following are personal accounts?

A. Buildings
B. Wages
C. Trade receivables
D. Trade payables
Options:
A. (iii) and (iv) only
B. (ii) and (iv) only
C. (i) and (iii) only
D. (ii) and (iii) only

17. If you sell a book to J. Flood on eBay and the buyer pays using PayPal, what are the accounts to debit and
credit?

A. Dr Bank Cr Sales
B. Dr J. Flood Cr Sales
C. Dr PayPal Cr Sales
D. Dr Cash Cr Sales

18. Transactions involve two elements. Which one guides you to identify the accounts to debit and credit?

A. The item exchanged


B. The buyer
C. The seller
D. The form of settlement

19. What are the journal entries if you exchange a van for a car from a second-hand motor dealer called R.
Main?

A. Dr R. Main Cr Van
B. Dr Car Cr Van
C. Dr Car Cr R. Main
D. Dr Van Cr Car

20. A debit balance of £100 in a cash account shows that:

A. There was £100 cash in hand


B. Cash has been overspent by £100
C. £100 was the total of cash paid out
D. The total of cash received was less than £100

21. £50 cash taken from the cash till and banked is entered:

A. Debit cash column £50: Credit bank column £50


B. Debit bank column £50: Credit cash column £50
C. Debit cash column £50: Credit cash column £50
D. Debit bank column £50: Credit bank column £50

22. What are the two fundamental characteristics of useful financial information according to the IASB’s
Conceptual Framework for Financial Reporting?

A. Completeness and neutrality


B. Comparability and understandability
C. Timeliness and verifiability
D. Relevance and faithful representation

23. ‘Posting’ the transactions in bookkeeping means:


A. Making the first entry of a double-entry transaction
B. Entering items in a cash book
C. Making the second entry of a double-entry transaction
D. Something other than the above

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