Accountancy Book Keeping

300 Most Important Questions
Accountancy and Bookkeeping

Set-3
By Jupiter Classes
60. Revaluation account prepared in a partnership firm is a

…
a) real Account
b) personal Account
c) nominal Account
d) asset Account
61. Which of the following statements about auditing is

correct?
a) The term “audit” is derived from the Latin word
“audire”.
b) The main objective of auditing is to determine whether
the balance
sheet gives true and fair view of company’s state of affairs.
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c) The secondary objective is detection and prevention of
frauds and
errors.
d) All of the above
62. Audit is legally obligatory for which of the following

organisations…?
a) Joint Stock Companies.
b) Sole Proprietor.
c) Partnership Firms
d) All of the above
63. Which of the following was the first Act to make audit of
company
accounts compulsory in India?
a) Companies Act 2013
b) Companies Act 1956
c) Companies Act 1913
d) Companies Act 1818
64. The first auditor of a company (other than Govt.
Company) shall be
appointed by the board of directors…?
a) within 30 days of registration.
b) within 30 days of commencement of business.
c) within 45 days of registration.
d) within 60 days of commencement of business.
65. What is the qualification required to be an auditor of a

company?
a) Company Secretary
b) Chartered Accountant
c) Chief Financial Advisor
d) None of the above
66. Which of the following is/are reasons for disqualification

of auditors?
a) If a person is an officer or employee of the company.
b) If a person or a firm has business relations with the
company.
c) If a person has been convicted by a court of an offence
involving fraud
and period of 10 years has not elapsed.
d) All of the above.
67. A detailed plan of the auditing work to be performed,

specifying the procedure to be followed in auditing is
called…?
a) audit Plan
b) audit Programme
c) audit Procedure
By Jupiter Classes
68. A book maintained by audit staff to note errors,
doubtful quarries and difficulties while auditing, is
called…?
a) audit diary.
b) audit register.
c) audit note book.
d) audit working papers.
69. A system in a organisation, wherein the work of one

employee is automatically checked up by the other and the
possibility of errors or fraud is reduced to the minimum is
called...?
a) internal check.
b) internal audit.
c) internal control.
d) internal discipline.
70. When an auditor is satisfied with the fairness of the

balance sheet and profit and loss account, which of the
following report will he give?
a) Qualified report
b) Unqualified report
c) Fairness report
71. Which of the following statement/s about Cash Book
is/are true?
a) It is a subsidiary book.
b) It performs the role of both journal and ledger.
c) Transactions are recorded in chronological order.
72. The system under which subsidiary books are

maintained is called…?
a) subsidiary system of bookkeeping.
b) practical system of bookkeeping.
c) original system of bookkeeping.
d) impractical system of bookkeeping.
73. Which of the following columns do we find in Double

column cash
book?
a) Cash and discount column.
b) Bank and discount column.
c) Cash and Bank column.
d) Any of the above
74. Which of the following balance does cash column in a

cash book has?
a) Always credit balance.
b) Always debit balance.
c) Debit or credit balance.
d) No balance
75. An entry written on both sides of cash book is called…?

a) double entry.
b) compound entry.
c) contra entry.
76. A particular type of cashbook maintained specially for

recording
smaller payments is called…?
a) mini cashbook
b) small cashbook
c) petty cashbook
d) imprest cashbook
77. A system of petty cashbook in which the amount

estimated necessary to meet petty expenses for a certain
period is fixed is called…?
a) ordinary petty cashbook
b) floating petty cashbook
c) imprest petty cashbook
d) none of the above
78. Which of the following account shows the result of

buying and selling of goods?
a) Profit and Loss account.
b) Sales account.
c) Purchase account.
d) Trading account
79. Which of the following types of expenses are debited to

Trading
account?
a) All types of expenses.
b) Only direct expenses.
c) Only indirect expenses.
d) Only operating expenses.
80. Closing stock is recorded at…?

a) Balance sheet only
b) Trading account only
c) Profit and loss account only
d) Balance sheet and Trading account.
81. Which of the following statements is true about single

entry system
of book keeping?
a) It is also called “Accounts from incomplete records”.
b) It is considered to be oldest form of bookkeeping.
c) It is an incomplete, inaccurate, unscientific system.
82. In Pure Single Entry System of bookkeeping which of

the following
accounts are maintained?
a) All types of accounts.
b) Only real accounts.
c) Only personal accounts.
d) Only nominal accounts.
83. A statement showing assets and liabilities prepared on

the basis of
single entry system of bookkeeping is called…?
a) Statement of Affairs.
b) Balance Sheet.
c) Single entry Balance Sheet.
d) None of the above.
84. Which of the following methods is used to calculate

profit or loss and to know the financial position in single
entry system of bookkeeping?
a) Statement of affairs method
b) Conversion method.
c) Both a and b.
85. Which of the following

accounts/statements cannot be prepared using single entry
system?
a) Trial balance.
b) Statement of Affairs.
c) Statement of Profit or loss.
86. In which of the following cases, single entry system is

most suitable?
a) Where cash transactions are in majority.
b) Where credit transactions are in majority.
c) Both cash and credit transactions are present equally.
By Jupiter Classes
87. For which of the following business organisations, double
entry
system is mandatory?
a) Sole trader
b) Partnership firm
c) Joint stock Company
88. Which of the following statement/s are true about

Public Finance
Management System?
a) It is a web based online software.
b) It was launched with an objective to track funds
released under various
government schemes.
c) It is developed and implemented by Office of Controller
General of
Accounts.
Jupiter Classes
89. What is the full form of CPSMS?
a) Corporate Plan Scheme Monitoring System
b) Central Plan Scheme Monitoring System
c) Central Plan Scheme Measuring System
d) Corporate Plan Scheme Measuring System
90. A formal review of company’s efforts regarding social

responsibility and its impact on society is called?
a) Corporate social responsibility.
b) Management audit.
c) Social audit.
91. Which of the following statements about depreciation is
correct?
a) Depreciation is permanent decrease in value of assets.
b) It is a non cash expense.
c) It is charged on fixed asset only.
Jupiter Classes
92. Which of the following asset does not normally
depreciate?
a) Machinery
b) Building
c) Furniture
d) Land
93. Which of the following terms is used in place of

“depreciation” in
case of natural resources such as coal mine, oil well etc?
a) Amortisation
b) Obsolescence
c) Depletion.
d) Depreciation.
94. Under which of the following methods of depreciation,

the value of
asset never reaches zero?
a) Straight line method
b) Written down value method
c) Original cost method
d) Fixed installments method
95.A bank reconciliation statement is prepared by?

a) Bank
b) Customer
c) Creditors
By Jupiter Classes
96. Favourable balance in cash book is…?
a) No balance
b) Credit balance
c) Debit balance
97. Which of the following types of bank accounts carry

minimum
interest?
a) Current account
b) Savings account
c) Fixed deposit account
d) Overdraft
98. A document drawn by a customer upon a specified

banker to pay
on demand a certain sum of money is called?
a) Draft
b) Pay in slip
c) Cheque
d) Voucher
99. A cheque on which a date is affixed following the date

the cheque is
written is called?
a) Ante dated cheque.
b) Post dated cheque.
c) Back dated cheque.
d) Postponed cheque.
100. When a business organisation deposits cash into the

bank, what
will bank do?
a) Credit its account.
b) Debit its account.
c) Depends on the size of cash amount.
d) No entry is made.
ANSWERS
60 c
61 d
62 a
63 c
64 a
65 b
65 b
66 d
67 b
68 c
69 a
70 b
71 d
72 b
73 d
74 b
75 c
76 c
77 c
78 d
79 b
80 d
81 d
82 c
83 a
84 c
85 a
86 b
87 c
88 d
89 b
90 c
91 d
92 d
93 c
94 b
95 b
96 c
97 a
98 c
99 b
a
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300 Most Important Questions

Accountancy and Bookkeeping

60. Revaluation account prepared in a partnership firm is a

61. Which of the following statements about auditing is

62. Audit is legally obligatory for which of the following

65. What is the qualification required to be an auditor of a

66. Which of the following is/are reasons for disqualification

67. A detailed plan of the auditing work to be performed,

69. A system in a organisation, wherein the work of one

70. When an auditor is satisfied with the fairness of the

72. The system under which subsidiary books are

73. Which of the following columns do we find in Double

74. Which of the following balance does cash column in a

75. An entry written on both sides of cash book is called…?

76. A particular type of cashbook maintained specially for

77. A system of petty cashbook in which the amount

78. Which of the following account shows the result of

79. Which of the following types of expenses are debited to

80. Closing stock is recorded at…?

81. Which of the following statements is true about single

82. In Pure Single Entry System of bookkeeping which of

83. A statement showing assets and liabilities prepared on

84. Which of the following methods is used to calculate

85. Which of the following

86. In which of the following cases, single entry system is

88. Which of the following statement/s are true about

90. A formal review of company’s efforts regarding social

93. Which of the following terms is used in place of

94. Under which of the following methods of depreciation,

95.A bank reconciliation statement is prepared by?

97. Which of the following types of bank accounts carry

98. A document drawn by a customer upon a specified

99. A cheque on which a date is affixed following the date

100. When a business organisation deposits cash into the

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