A systematic way to maintain the books of accounts is called_________?

A. Accountancy
B. Economics
C. Book Keeping
D. Auditing

An Art of reading, classifying & Summarizing of accounts in a systematic way is called__________?

A. Accounting
B. Accountancy
C. Auditing
D. Book Keeping

The maintenance of accounts in a systematic way is called__________?

A. Accounting
B. Reading
C. Book Keeping
D. Auditing

Goods Return by the customer are termed as :

A. Purchase return
B. Customer return
C. Sales return
D. Inventory return

Modern system of book keeping is called______________?

A. Double entry system

B. American system
C. Single entry system
D. Italic system

The person to whom goods are sold on credit is called___________?

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A. Buyer
B. Seller
C. Debtor
D. Creditor

Double entry means______________?

A. Entry in two sets of books

B. Entry at two ends
C. Entry at two dates
D. Entry for two aspects of the transaction

Discount received is a/an:

A. Asset
B. Expense
C. Liability
D. Revenue

Obligation of the Business are known as___________?

A. Liabilities
B. Revenues
C. Expenses
D. Assets

The amount invested by the proprietor to start the business is called:

A. Capital
B. Business
C. Drawings
D. All of them

Cash discount is provided on _______________?

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A. Purchases
B. Prompt payment
C. Sales
D. Sales return

Goods return to supplier are known as:__________?

A. Merchandise return
B. Purchase return
C. Return inwards
D. Sales return

The excess of current assets over current liabilities is called:

A. Working Capital
B. Circulating capital
C. Fixed capital
D. Trading capital

When goods, in which business deals are sold, it is called___________?

A. Purchases
B. Return inward
C. Sales
D. Return outwards

Sales return is also known as____________?

A. Return received
B. Return Payed
C. Return inward
D. Return outward
(more…)

reduction in price is called:

A. Paid price
B. Invoice price
C. Book price
D. Discount

Cash brought by the owner to start business is called__________?

A. Capital
B. Loan
C. Drawing
D. None of these

The concession received on the price of defective goods is called:

A. Discount
B. Cash discount
C. Allowance 
D. Trading discount

In support of business transaction, any written evidence is called ___________?

A. Discount
B. Voucher
C. Allowance
D. Price

Building and furniture are called ____________?

A. Current asset
B. Fictitious asset
C. Tangible asset
D. Fixed assets

For the business, capital is ____________?

A. Expense
B. Liability
C. Assets
D. All of them
When owner withdraw cash for its private use, it is called ___________?

A. Profit
B. Income
C. Expense
D. Drawing

Assets having physical existence are called ___________?

A. Current asset
B. intangible asset
C. Tangible asset 
D. Liquid asset

The assets which have some market value are called ____________?

A. Fixed asset
B. Quick asset
C. Fictitious assets
D. Real assets

The assets which come into existence upon the happening of a certain event are called__________?

A. Contingent assets
B. Fixed assets
C. Fictitious assets
D. Quick assets

Income earned but not received is called ____________?

A. Fictitious assets
B. Quick asset
C. Real asset
D. Outstanding asset

Debts which are payable in the course of a month are called _____________?

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A. External liabilities
B. Fixed liabilities
C. Current liabilities
D. Liquid Liabilities

The unsold goods are ______________?

A. Equity
B. Sale return
C. Inventory
D. Purchases

The systems of accounting are _____________?

A. Two
B. Three
C. Five
D. Six
(more…)

A sale of Rs. 50.000 to A was entered as a sale to B. This is an example of____________?

A. Error of omission
B. Error of commission
C. Compensating error
D. Error of principle

Trial balance is prepared to check accuracy of_______________?

A. Ledger accounts balances 

B. Balance sheet balances
C. Income statement balances
D. Cash flow statement balances

If a transaction is completely omitted from the books of accounts, will it affect the agreement of a trial
balance?

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A. Yes
B. No
C. Transactions can’t be omitted
D. none of these

________ is the common base for preparing a trial balance?

A. Ledger accounts 
B. General Journal
C. Specialized journals
D. Balance sheet

Which of the following is true about a trial balance?

A. It lists down the balances of accounts 

B. It lists down the balances of a balance sheet
C. It is a kind of financial statement
D. It is not a part of accounting cycle

Debit balance = Credit balance in a trial balance indicates that:

A. No error in recording transactions

B. No error in posting entries to ledger accounts
C. Account balances are correct
D. Mathematically Capital+Liabilities=Assets

Trial balance is commonly prepared?

A. Frequently during the year

B. At the end of an accounting period
C. At the end of a month
D. At the end of a year

Which of the following will affect the agreement of a trial balance?

A. Complete omission of a transaction

B. Partial omission of a transaction 
C. Error of principle
D. Compensating errors

If debit balances = credit balances, trial balance only shows or check the ____________ and it does not
indicate that no errors were made during recording and posting.

A. Arithmetic accuracy 
B. Errors of commission
C. Omissions of economic events
D. Understatements of balances

Which of the following account with normal balance is shown at the debit side of a trial balance?

A. Rent income account

B. Creditors account
C. Unearned income account
D. Cash account

Which of the following account with normal balance is shown at the credit side of a trial balance?

A. Cash account
B. Bank account
C. Equipment account
D. Accrued expenses account

Which of the following specialized journals records “goods returned by customers”?

A. Purchase journal
B. Sales journal
C. Purchases return journal
D. Sales return journal

Sales on credit is recorded in which of the following journal?

A. Purchase journal
B. Sales journal
C. Purchases return journal
D. Sales return journal

Transactions that a BUSINESS doesn’t record in any specialised journal are recorded in which of the
following journals or day books?

A. Cash payments journal

B. Cash receipts journal
C. Purchases return journal
D. General journal

Another name of journal is_____________?

A. Specialized journal
B. Day book
C. Cash book
D. Record book

Which of the following specialised journals will record “goods returned by the BUSINESS “?

A. Purchase journal
B. Sales journal
C. Purchases return journal
D. Sales return journal

Sales and purchase journal don’t record__________?

A. Credit sales
B. Credit purchases
C. Credit sales and purchases
D. Cash sales and purchases

Cash received from debtor is recorded in which of the following SPECIALIZED journals?

A. Purchase journal
B. Sales journal
C. Cash receipts
D. Cash payments journal
Which of the following is a type of cash receipt journal + cash payment journal?

A. Bank statement
B. Statement of cash flow
C. Cash book
D. Cash documents

In accounting an Economic event is referred to as:

A. Cash
B. Bank statement
C. Transaction 
D. Exchange of money

Identify the correct sequence of accounting process

A. Communicating→Recording→Identifying
B. Recording→Communicating→Identifying
C. Identifying→communicating→recording
D. Identifying→recording→communicating

Bookkeeping mainly concerns with which part of accounting process?

A. Analyzing
B. Preparing financial statements
C. Recording financial information
D. Auditing the books of accounts

Financial accounting provides financial information to all of the following external users except:

A. Government agencies
B. investors
C. Creditors
D. Managers

For which step of accounting process the accountants of business entity prepare financial statements?
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A. Identification of economic event

B. Communication of financial information 
C. Recording financial information
D. Making decisions about business

Keeping the log of financial information in books of original entries is called__________?

A. Recording 
B. summarizing
C. Grouping
D. Processing

Which of the following is the external user of financial statements?

A. Manager of the business

B. CEO of the business
C. Creditor of the business 
D. Controller of the business

Which of the following is the internal user of financial statements?

A. Creditor of the business

B. Government agency
C. Shareholder of the business
D. Manager of the business

_________ is the first phase of accounting cycle?

A. Identifying an economic event or transaction

B. Preparing journals
C. Posting entries to ledger accounts
D. Making decisions about business
B. Financial statements differ from management account because
C. 0

D. A. They are mainly prepared for external users of financial information 

B. They are more complex and hard to prepare
 C. The are the summary of accounting data
D. The are prepared on basis of actual concept
E. ________ is a separate legal entity that Total capital can be divided in many shares.
F. 0

G. A. Partnership
B. Sole proprietorship
C. Company 
D. Non-profit organization
H. An asset posses which of the following?
I. 0

J. A. Future economic benefits for the business 

B. All kind of benefits for the business
C. Expenses for the business
D. Merits and Demerits for the business
K. Liabilities are which of the following?
L. 0

M. A. Resources
B. Obligations 
C. Future benefits
D. Expenses
N. ________ is the gross inflow of economic benefits?
O. 0

P. A. Assets
B. Liabilities
C. Income 
D. Expenses
Q. The gross decrease in economic benefits for the business are what?
R. 0

S. A. Expenses
B. Obligations
C. Creditors
D. Income or gain
T. An asset must be _______ by the business to be shown as an asset in its “balance sheet”
U. 0

V. A. Possessed
B. Owned
C. Controlled 
D. Used
W. Liability are arisen from which of the following events?
 X. 0

Y. A. Present event
B. Future event
C. Past event
D. None of them
Z. Which of the following can be considered as the most important phase of accounting cycle
and it is the primarily objective of financial accounting?
AA.0

BB. A. Identifying transactions

B. Preparing “T Accounts”
C. Preparing financial statements 
D. Preparing trial balances

What is the basic accounting equation?

A. Capital+Liabilities=Assets
B. Assets+ liabilities =Capital
C. Capital+assets=liabilities
D. Liabilities+Capital

Which of the following is a liability?

A. Cash
B. Equipment
C. Debtors
D. Creditors

What is equity?

A. Cash from the business

B. liability of a business
C. Owner’s claim on total assets 
D. Owner’s claim on total liabilities

Identify the asset from the following:

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A. Cash and cash equivalent 

B. Creditors
C. Notes payable
D. Bank loan

_______ the withdrawal of cash and goods by the owner of the busienss for his/her personal use?

A. Depreciation
B. Drawings
C. Outflow of cash
D. Appreciation

Net loss occurs when______________?

A. Expenses are greater than Income

B. Expenses are less than Income
C. Expenses=Income
D. Liabilities are greater than income

Double entry implies that

A. Recording entries in journal

B. Recording entries in Ledger account
C. Recording two aspects of every transaction 
D. Recording every transaction in books

Identify the nominal account

A. Machinery account
B. Building account
C. Creditors account
D. Rent expenses account

Which of the following accounts can be classified as a real account?

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A. Rent expenses account
B. Rent income account
C. insurance expenses account
D. Cash account

Transferring entries from journal to ledger account is commonly known as____________?

A. Recording
B. Transferring
C. Posting
D. Entry making

An account records the ___________ in the balance of an item?

A. Increase
B. Decrease
C. Increase or decrease 
D. Appreciation

If credit side of a bank account is greater than the debit side, it indicates which of the following?

A. Bank overdraft 
B. Cash at bank
C. Bank balance
D. Current Asset

If debit side of a bank account is greater than credit side it indicates which of the following?

A. Cash at bank 
B. Bank understatement
C. Bank overdraft
D. Balance overstatement

_________ will be credited if goods are given as charity?

A. Cash
B. Charity
C. Purchases
D. Sales

Which of the following is known as the base for preparing trial balance?

A. Journal
B. Cash account
C. Ledger account
D. Balance sheet

If debit balance is greater than creadit balance then the account blance will be__________?

A. Credit balance
B. Debit and credit balance
C. Cash balance
D. Debit balance

The normal balance of capital account is_____________?

A. Credit balance
B. Debit balance
C. Cash balance
D. Neither debit nor credit balance

The normal balance of asset account is____________?

A. Credit balance
B. Debit balance 
C. Cash balance
D. Neither debit nor credit balance

The normal balance of liability account is____________?

A. Debit balance
B. Credit balance 
C. Cash balance
D. Neither debit nor credit balance
Which of the following statements is incorrect regarding capital account?

A. Debit increases the capital account balance 

B. Credit increases the capital account balance
C. Fresh capital increases the capital account balance
D. Net income increases the capital account balance

Find out the value of assets if: Liabilities=$5000 and Capital=$1000

A. $4000
B. $6000
C. $7000
D. $3000

Calculate the amount of cash if: Total assets=$10,000 Total liabilities=$10,000 Total Capital=$5000

A. $6000
B. $10,000
C. $5000
D. $1000

Capital increases if _________ increases?

A. Expenses
B. Drawings
C. Interest on capital
D. Revenue

Capital of a business decreases if there is an increase in___________?

A. Drawings 
B. Income
C. Gains
D. Fresh capital

If the total liabilities of a business decrease by $5000 what will be the effect on total asset?
0

(assuming the amount of capital remain same)

A. Remain constant
B. Decrease by $5000 
C. Increase by $5000
D. Increase by $10,000

If the business’s owner withdraws cash for his/her personal use what will be the effect on capital?

A. Increase in capital
B. Remain the same
C. Decrease in capital
D. No effect on capital

Net income equal to Revenues minus____________?

A. Gains
B. Depreciation
C. Expenses
D. Capital expenditures

Collection of account receivable will

A. Increase assets and decrease assets 

B. Increase assets and decrease liabilities
C. Increase assets and increase capital
D. Increase assets and increase cash

Payment of expenses will ______ the assets

A. Increase
B. Reduce 
C. apportion
D. Overstate

The process of recording is done?

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A. Two times a year
B. once a year
C. Frequently during the accounting period
D. At the end of a accounting period

If Cash=$1000 inventories=$4000 Debtors=$5000 fixed assets=? Capital+Liabilities=$15000 What is the

Amount of total assets?
0

A. $5000 
B. $10,000
C. $15,000
D. $20,000