2.

10 Tulsian's Accountancy
THEORETICAL QUESTIONS

(WITH ANSWERS]

(rv) Trade Receivables

1.1 Explain the tollowing terms (ri)TradePayables

Assets (xvil) income

Liabilties (xvii) Capital Expenditure

)Capita (xix) Revenue Expenditure
() Revenue ( ) Detered Revenue Eperre
() Expenses (xi) Capital Receipts
() Goods (xxi) Revenue Receipts
(vi) Purchases
(Xxii) Gains
(vii) Sales
(xoxoiv) Losses
(ix) Stock
(xv) Trade Discount
(x)Debtor (ovi) Cash Discount
(xi) Creditor
(xoxvii) Voucher
(x)Transaction
(xxvii) Purchase Returms
(xili) Account
(xocix) Sales Retums
(xiv) Drawings
Ans. Refer tex
1.2 Classity the following under Assets, Liabilities, Revenues, Expenses or
Capital:
0 Machineny
i)Purchases
(m) Stock
(V) Creditors
()Capital
(vi) Salary paid to a clerk
(Vi) Sales
(Vii) Fumiture
(i) Interest received

()Rentpaid
(xi) Loans taken
(xii) Loans granted
[Ans. () Asset (i) ExpeNse () Asset (iv) Liability (v)
(vii) Revenue (vii) Asset (x) Revenue (x) Expense (xi) Capital (vi) Expense
Liability (xii) Asset
 ddse Loan

MULTIPLE CHOICE QUESTIONS

, Which of the following is correct?
Assets =
Liabilities
(a)
(b) Assets = Capital -
Capital
Liabilities

c) Assets =
Liabilities Capital
(d) Assets External Equities
2. Which of the following is correct?
(a) Profit/Loss= Closing Capital + Additional Capital
(b) Profit/Loss =
-

Drawings
Closing Capital-
made -

Opening Capital
Drawings made
Additional Capital Opening Capital
-

(c) Profit/Loss = Opening Capital + Drawings made

Additional Capital
-

Closing Capital -

(d) Profit/Loss = Closing Capital + Drawings made

-

Additional Capital Opening Capital

3. Which of the following is correct?
(a) Opening Capital = Closing Capital Additional Capital
- Drawings Profit
(b) Opening Capital = Closing Capital + Drawings
-
Additional Capital Loss
(c) Opening Capital = Closing Capital+ Drawings
- Additional Capital - Profit

(d) None of these

4. Which of the following is correct?
(a) Closing Capital Opening Capital+
= Additional Capital
Drawings -

Profit -

(b) Closing Capital= Opening Capital + Additional Capital

- Drawings + Profit
(c) Closing Capital =
Opening Capital Additional Capital
- Drawings Loss
(d) None of these
7.28 Tulsian's Accountancy

liabilities of firm are 6,000 and the capital of the propre

rietu
5. The a

4.000. The total assets are

(a) 6.000 (b)F 10,000
(c) 2,00o (d) None of these
31.12.2014 is 60,000 and capital is 45,000. Its liahi
6. The assets on
on that date shall be
(a)60,000 (b) 1,05,000
(C) 15.000 (d) None of these
Ram has assets of 7
be
10.000 and liabilities of 7 2,000. His captal
(a) 10,000 (b) 12,000
(c)8,000 of these (d) None
8. If a firm borrows a sum of money, there will be
(a) increase in capital (b) Decrease in capital
(c) No effect on capital (d) None of these .
1.(c), 2. (d), 3. (c), 4. (b), 5. (b), 6. (c).
 JOurnaising. Posting
Dsting and
and Balancing 8.79
MULTIPLE CHOICE QUESTIONS
1. Debit means

increase in asset
(a) An
(b) An
increase
in liability
in asset
(c) A decrease
An increase in capital
(d)
2. Credit nmeans

mcredse n asset
An
(a)
An increase liability
in
(b)
(c) A decrease in liability
A decrease in capital
(d)
a book of
Journal iS
3.
(a) Original entry
(b) Secondary entry
cash transactions
(c) All
non-cash transactions
(d) All
a book of
4. Ledger is
(a) Original entry
(b) Secondary entry
cash transactions
(c) All
non-cash transactions
(d) All
or recording a transaction in the journal is called
5. The process
(a) Posting
(6) Journalising
(c) Tallying9
(d) Casting
is filled at the time of
6 LF. (i.e. Ledger Folio Column) in the journal
(a) Journalising
(6) Balancing
(c) Posting
() Casting
in aa
transactions relating to changes
1, Ine process of transferring the
of an account is called
particular item at one place in the form

a) Journalising
(b) Balancing
c) Posting
(d) Casting
are recorded in the
ne words To Balance b/f or 'By Balance b/f
Paricular Column' at the time of posting o.
(a) All compound entries (b) An opening entry
C) A (d) An adjusting entry
closing entry ced
the are
aly, following accountsminal Accounts
a) Personal Accounts and
Accounts
eal Accounts and Nominal
(di Anal Accounts and Real Accounts
d) None of these
8.80 Tulsian's Accountancy

is a cash transaction
Which of the following
10.
(a) Sold goods
to Ram
(b) Sold goods credit
on
(C) Sold goods to Ram
on account
(d) Sold goods to Ram
credit transaction?
Which of the following is
a
11.
(a) Sold goods
cash
(6) Sold goods for
for cash
(C) Sold g00ds to Ram
(d) Sold goods to Ram
paise in the rupee from the
Received a first and final dividend of 60
12. 1,000
Official Receiver of Mr Rajan who owed us
(a)Discount Allowed A/c be debited with F 400
(D) Bad Debts Recovered Ac be debited with 600
(c) Bad Debt Alc be credited with R 400
(d) Bad Debt A/c be debited with 7 400
for installing
13. On purchase of
the machine
a machine, 100 is paid to workers as wages
(a) Wages Alc be debited
(b) Installation charges Alc be debited
(c) Machinery Ac be debited
(d) Workers Alc be debited
14. Purchase of an asset is
(a) An expense (b) A Loss
(c) An Asset (d) None of these
15. Patent Right is
(a) Personal Account
(b) Real Account
(c) Nominal Account
(d) Expense Account
The folowing account has a credit balance
(a) Garnage Inward
(D) Carnage Outward
(C) Return Inward
(d) Returns Outward
Ans. 1. (a). 2. (b). 3. (a). 4
(b),
10. (a). 11 (a).
5
(b), 6. (C).
(c), 7.
7. (c),
(C). 8. (b)16
12. (d). 13 (c), 14. (c). )
15.
9.38 Tulsian's Accountancy

MULTIPLE CHOICE QUESTIONs

1. Cash book is used to record
(a) All receipts only (b) All payments only
(c) All cash and credit sales (d) All receipts and payments of cash
2. Cash receipts are recorded
(a) On debit side (b) On credit side
(c) On both sides (d) None of these
3. Cash payments are recorded
(a) On debit side (b) On credit side
(c) On both sides (d) None of these
4. Which of the following is correct?
(a) Cash Book is a journal and not a ledger
(b) Cash Book is ledger and not a journal
(c) Cash Book is both a journal and a ledger
(d) None of these
5. When a fim maintains a simple Cash Book, it needs not maintain
(a) Sales Journal (6) Purchases Journal
(c) General Journal (d) Cash Account in the Ledger
6. Single Column Cash Book may show
(a) Only a debit balance
() Only a credit balance
(c) Either debit balance or a credit balance
(d) None of these
7. When a firm maintains a Three-Column Cash Book, it needs not
maintain
(a) Cash Account in the ledger
(b) Bank Account in the ledger
(c) Discount Account in ledger
(d) Both Cash Account and Bank Account in the ledger
8. When a cheque received on a particular date is not deposited on the sane
day into bank, it is entered in
(a) Cash Column on the debit side
(b) Bank Column on the debit side
(c) Cash Column on the credit side
(d) Journal proper
9. When cheque is returned dishonoured, it is recorded
a
in
(a) Cash Column on the credit side
(b) Cash Column on the debit side
(c) Bank Column on the credit side
(d) None of these
10. When a cheque recelved is endorsed, it must be entered On
(a) Credit side of the Cash book
Debit side of the Cash Book
only
(b)
(c) Both sides of the Cash book
only
(d) None of these
 Three-Column Cash Book
Subsidiary Books -
17 nreeeount
Trade nint allowed recorded on the is
Cash Book 9.30

(C
received
count Columns are balanced
b Discount Colu
is
recorded on the debit side of
credit side Cash Boo
of thess of Cash
(d)
None
Boo
2 . t h e adebit s well as the credit
the Cash BoOK IIself, it is called aspects of a
transaction are
recorded
An opening entry (6)
Ia) A
c) A
transier entry
(d) compound
A contra entry
actions enlerea on ine
debit side of the entry
side of the Ca Book
3The debit concerned ledger
are to be
posted to
(a)
credit side of the
the concerned accounts in the
(b) he debit side of the Sales Acco ledger CCOunts
The
accounts in the ledger
Account the ledger
d) in
c) The credir side of the Purchase Accountthein ledger the ledger
ransactio
tions entered on tne credit side
of the Cash Book are to be
to
posted
debit side of the
concerned ledger accOunts in the
a) The
D) The redit side of the concerned ledger accounts in the ledger
ledger
iThe debit side of the sales AccOunt in the ledger
The credit side o the Purcnase Account in the ledger
Which of the following transactions is posted in the ledger
into bank
Cash deposited
(a) withdrew from bank
b) Cash
from bank for personal use
(c) Cash withdrew
(d) None of these
transactions is not posted in the ledger?
16. Which of the tollowing Withdrew from bank for personal use
Withdrew from bank (b)
a) None of these
Withdrew for personal use (d)
(C)
a Three-Column
Cash Book
17. In are balanced
Discount Column
(a) Only Cash Column and
are balanced
Discount Column
(D) Only Bank Column and
Column are balanced
Column and Bank balanced
C) Only Cash Bank Column and
Discount Column
are

0 Casn Column, Book may show

6.Bank Column of the Cash (D) Only
a credit
balance

(a) Only a debit balance

or a credit Daldiio
Either a debit balance
d) None of these Cash
BoOK?
%. side of a
Which is entere
enered on the debit discount
Trade
received

a) Trade discount alowed (b) discount

received

Cash
) Cash discount allowed (d) Cash
Book?
Column
Three
Which is not
Contra entry in
ash deposited into bank
O Cash withdrew from bank use

C)Cash Bank for personal

None withd
from 7. (d),
9) 6. (a),
of these 5. (a), 14. (a),
(b), 4. (C), (b),
3.
2. (a), (0),.13.
12. (c)]
Ans.
1. (d), 11.(b), 19. (C), 20.
10. (c), 18. (C)
. (a), 9. (c), 17. (C),
(a),
15. (c), 16.