The root of financial accounting system is ______.

(a)

Social accounting

(b)

Stewardship accounting

(c)

Management accounting

(d)

Responsibility accounting

Who is considered to be the internal user of the financial information?

(a)

Creditor

(b)

Employee

(c)

Cutomer

(d)

Government

Indirect expenses appear in _______

(a)

Trading account

(b)

Profit & loss account

(c)

debts account

__________ refers to choosing a desirable course of action from alternative course of actions.

(a)

Control

(b)

Forecasting 

(c)

Decision Making 

(d)

None of the above

The business is liable to the proprietor of the business in respect of capital introduced by the person according to

(a)

Money measurement concept

(b)

Cost concept

(c)

Business entity concept

(d)

Dual aspect concept

The rule of stock valuation 'cost price or realisable value' whichever is lower is based on the accounting principle of :

(a)

Materiality

(b)

Money measurement

(c)

Conservatism

(d)

Accrual

__________ concept helps in keeping business affairs free from the influence of personal affairs of the owner.

(a)

Business entity

(b)

Money measurement

(c)

Cost

(d)

Dual aspect

Evaluating the performance of different periods is possible in _______

(a)

Periodicity concept

(b)

Dnal aspect

(c)

Accrual concept

Real account deals with  

(a)

Individual persons

(b)

Expenses and losses

(c)

Assets

(d)

Incomes and gains

With drawal of cash from business by the proprietor should be credited to 

(a)

Drawings A/c

(b)

Cash A/c

(c)

Capital A/c

(d)

Purchases A/c

________ is prepared in three copies.

(a)

Debit Note

(b)

Credit Note

(c)

Receipts

(d)

Invoice

Which of the following is correct?

(a)

Capital = Assets + Liabilities

(b)

Capital = Assets - Liabilities

(c)

Assets = Liabilities + Capital

(d)

None

The process of transferring the debit and credit items from journal to ledger accounts is called 

(a)

Casting

(b)

Posting

(c)

Journalising

(d)

Balancing

If the total of the debit side of an account exceeds the total of its credit side, it means

(a)

Credit Balance

(b)

Debit Balance

(c)

Nil Balance

(d)

Debit and Credit Balance

Entry in which more than one transactions are recorded is called _______________

(a)

compound entry

(b)

single entry

(c)

double entry

(d)

journal entry

Balances in the Nominal accounts are ___________

(a)

Carried forward to next accounting year

(b)

Carried forward to Trading and Profit and Loss A/c

(c)

Carried forward to Balance Sheet

(d)

None of the above

While preparing the trial balance, the accountant finds that the total of the credit column is short by Rs.200. This difference will be

(a)

Debited to suspense account

(b)

Credited to suspense account

(c)

Adjusted to any of the debit balance

(d)

Adjusted to any of the credit balance

Which of the following method(s) can be used for preparing trial balance?

(a)

Balance method

(b)

Total method

(c)

Total and Balance method

(d)

a, b and c

The preparation of trial balance is for___________

(a)

Locating errors of commission

(b)

Locating errors of principle

(c)

Locating clerical errors

(d)

All of the above

While Preparing the trial balance, the accountant finds that the total of the debit column is short by Rs. 1,000. This difference will be

(a)

Debited to suspense account

(b)

created to suspense account

(c)

Adjusted to any of the debit balance

(d)

Adjusted to any of the credit balance

Purchases book is used to record______

(a)

all purchases of goods

(b)

all credit purchases of assets

(c)

all credit purchases of goods

(d)

all purchases of assets

Sales return book is used to record_________

(a)

Returns of goods by the customer for which cash is paid immediately

(b)

Returns of goods by the customer for which cash is not paid immediately

(c)

Returns of assets by the customer for which cash is not paid immediately

(d)

Returns of assets by the customer for which cash is paid immediately

The person who endorses is called the _____

(a)

Endorser

(b)

Endorsee

(c)

Drawer

(d)

Drawee

Returns outward book is also known as _____

(a)

Purchase returns book

(b)

Sales return book

(c)

Purchase Book

(d)

Sales Book

Cash book is a_______

(a)

Subsidiary book

(b)

Principal book

(c)

Journal proper

(d)

Both subsidiary book and principal book

If the debit and credit aspects of a transaction are recorded in the cash book, it is ______.

(a)

Contra entry

(b)

Compound entry

(c)

Single entry

(d)

Simple entry

____________ is maintained by every business, whether small or large is size

(a)

Sales book

(b)

Purchase book

(c)

Cash book

(d)

Credit book

On Jan 1^st 2015, 1,000 given to petty cashier. He has spent Rs. 860 during the month of January. On Feb 1^st to make the imprest he will receive the cheque for ________

(a)

1,000

(b)

860

(c)

1,860

(d)

960

Debit balance in the bank column of the cash book means _______.

(a)

Credit balance as per bank statement

(b)

Debit balance as per bank statement

(c)

Overdraft as per cash book

(d)

None of the above

A bank reconciliation statement is prepared to know the causes for the difference between:

(a)

The balance as per the cash column of the cash book and bank column of the cash book.

(b)

The balance as per the cash column of the cash book and bank statement

(c)

The balance as per the bank column of the cash book and the bank statement.

(d)

The balance as per petty cash book and the cash book

When the balance as per cash book is the starting point; direct deposits by the customers are_______

(a)

added

(b)

subtracted

(c)

neither of the two

Uncollected cheques are also known as __________

(a)

 outstanding cheques

(b)

Uncleared cheques

(c)

Outstation cheques

(d)

Both a & c

Error of principle arises when _______.

(a)

There is complete omission of a transaction

(b)

There is partial omission of a transaction

(c)

Distinction is not made between capital and revenue items

(d)

There are wrong postings and wrong castings

Wages paid for installation of machinery wrongly debited to wages account is an error of _______.

(a)

Partial omission

(b)

Principle

(c)

Complete omission

(d)

Duplication

Goods of Rs. 5000 purchased from Mr.B were recorded in sales book, the rectification of this error will________.

(a)

Increase the gross profit

(b)

Reduce the gross profit

(c)

Have no effect on gross profit

(d)

None of the above

________ are those transactions which are not recorded as per the rules of debit and credit. 

(a)

Error of principle

(b)

Error of Commission

(c)

Error of Omission

(d)

Compensating errors

Under straight line method, the amount of depreciation is ____.

(a)

Increasing every year

(b)

Decreasing every year

(c)

Constant for all the years

(d)

Fluctuating every year

A depreciable asset may suffer obsolescence due to______.

(a)

Passage of time

(b)

Wear and tear

(c)

Technological changes

(d)

None of the above

Depreciation is the gradual and permanent decrease in the value of an asset from any cause ________.

(a)

Owen

(b)

Wheeler

(c)

Spicer and Pegler

(d)

R.N. Carter

_________ is also known as residual value.

(a)

Book value

(b)

Scrap value

(c)

Amortization

(d)

Wear and tear

Expenditure incurred Rs.20,000 for trial run of a newly installed machinery will be ______.

(a)

Preliminary expense

(b)

Revenue expenditure

(c)

Capital expenditure

(d)

Deferred revenue expenditure

Revenue expenditure is intended to benefit ______.

(a)

Past period

(b)

Future period

(c)

Current period

(d)

Any period

Revenue receipts are__________ in the business.

(a)

non-recurring

(b)

recurring

(c)

neither of the above

(d)

A AND B

Cost of acquisition of land and building is an example of __________.

(a)

Capital expenditure

(b)

Revenue expenditure

(c)

Capital receipts

(d)

Revenue receipts

Net profit of the business increases the ______.

(a)

Drawings

(b)

Receivables

(c)

Debts

(d)

Capital

Carriage inwards will be shown _______.

(a)

In the trading account

(b)

In the profit and loss account

(c)

On the liabilities side

(d)

On the assets side

____________ are assets of a relatively permanent nature used in the operations of business and not intended for sale

(a)

Fixed Assets

(b)

Current Assets

(c)

Tangible Assets

(d)

Intangible Assets

Fixed assets does not include

(a)

Plant

(b)

Stock

(c)

Furniture

(d)

Computer

Net profit is ______.

(a)

Debited to capital account

(b)

Credited to capital account

(c)

Debited to drawings account

(d)

Credited to drawings account

Closing stock is valued at ______.

(a)

Cost price

(b)

Market price

(c)

Cost price or market price whichever is higher

(d)

Cost price or net realisable value whichever is lower

_________contributed by proprietor is a liability to the business.

(a)

Drawings

(b)

Profit

(c)

Loss

(d)

Capital

__________represents the amount or goods withdrawn by the proprietor from the business for his personal use. 

(a)

Drawings

(b)

Purchase

(c)

Sales

(d)

Capital

In accounting, computer is commonly used in the following areas:

(a)

Recording of business transactions

(b)

Payroll accounting

(c)

Stores accounting

(d)

All the above

An example of output device is _______.

(a)

Mouse

(b)

Printer

(c)

Scanner

(d)

Keyboard

______________ can perform functions at much higher speed than the speed of human beings.

(a)

Computerised accounting system

(b)

Hardware system

(c)

Software system

(d)

None of these

________________ packages are used by small and conventional business enterprises.

(a)

Readymade

(b)

customised

(c)

Tailor-made

(d)

None of these