Rajiv Gandhi Business School

Multiple Choice Questions Examination

Subject-Accounting for Business Decision (104)
Time -25
Minutes
Date-08/09/2016
Marks-20 Marks
-----------------------------------------------------------------------------------------------1) Drawings account is related to:
a. Nominal Account.
b. Personal Account.
c. Real Account.
d. Company drawings account.
2) Goodwill account is related to:
a. Nominal account.
b. Personal account.
c. Real account.
d. Tangible account.
3) According to the going concern concept, a business entity is assumed to have:
a. A long life.
b. A very short life.
c. An indefinite life.
d. A medium life.
4) Accounting does not record non-financial transactions because of
a. Accrual concept.
b. Entity concept.
c. Measurement concept.
d. Double entry concept.
5) According to which of the following concepts even the owner of the
business who provides capital treated as a creditor of the business?
a. Entity concept.
b. Cost concept.
c. Money measurement concept.
d. Convention of disclosure.
6) Goods of the value of Rs. 1500 taken by the proprietor for his personal use should be
debited to:
a. Drawing account.
b. Sales account.
c. Purchases account.
d. Stock account.

7) Which of the following accounts may have a debit or credit balance?

a. Discount Received account.
b. Sales account.
c. Trade expenses account.
d. Loan account.
8) Which of the following books should be used to record purchase of furniture on
credit?
a. Cash book.
b. Journal proper.
c. Purchases book.
d. Sales book.
9) According to money measurement concept, which one the following will
be recorded in the books of accounts_______.
a. excellent morale of workers.
b. quality control in the business.
c. managing ability of the manager.
d. cost of machinery

10) Accountants use generally Accepted Accounting Principles (GAAP) to make the
financial information communicated
a. Relevant
b. Reliable
c. Comparable
d. Profitable

11) Which of the following highlights the correct order of the stages in the accounting
cycle?
a. Journalizing, final accounts, posting to the ledger and trial balance
b. Journalizing, posting to the ledger, trial balance and final accounts
c. Posting to the ledger, trial balance, final accounts and journalizing
d. Posting to the ledger, journalizing, final accounts and trial balance

12) The elements of the accounting equation are

I. Assets
II. Liabilities
III. Trial Balance
IV. Capital
a. I, II and III
b. I, II and IV
c. I, III and IV
d. II, III and IV

13) The purchase of a motor car on credit from Toy Automotive Company for use in a
firm should be recorded as
a. Dr. Maintenance of vehicle expense, Cr. Toy Automotive Company
b. Dr. Purchases, Cr. Toy Automotive Company
c. Dr. Motor vehicle, Cr. Toy Automotive Company
d. Dr. Motor vehicle, Cr. Cash
14) Double entry book-keeping was fathered by:
a. F.W.Taylor
b. Henry Fayol
c. Lucas Pacioli.
d. Peter Druker
15) The accounting information specially prepared to aid managers is called
a. Cost Accounting
b. Management Accounting
c. Financial Accounting
d. Human Resource Accounting
16) GAAP stands for ..
a. General Accounting and Audit Principles
b. Generally Accepted Audit Policies
c. Generally Accrued Accounting Principles
d. Generally Accepted Accounting Principles
17) If Assets = Rs. 1 99,500 and Owner's equity =
a. Rs. 298,000
b. Rs. 100,000
c. Rs. 99,500
d. Rs. 115000

Rs. 99,500 then Liabilities = ?

18) Which of the following is not a convention of financial accounting?

a. Consistency
b. Materiality
c. Full disclosure
d. Conservatism
19) Cost Accounting is
a. Accounting of product or service cost
b. Monetary transactions of business
c. Non Monetary Transactions of business
d. For external users
20) Balance sheet is also known as ____
a. Cash flow statement
b. Fund flow statement
c. Analysis statement
d. Position statement
*Best of Luck*