Multiple Choice Questions

Subsidiary Books

1. The following is not a book of original entry 8. Parties' Accounts are debited for ………………..
(a) the journal Sales of goods
(b) the ledger (a) Cash
(c) the Cash Book (b) Credit
(d) the Bill Receivable Book (c) Retail
(d) None of the above
2. Journal proper is called
(a) Principle Book 9. The periodical total to a purchase returns books is
(b) Subsidiary Book recorded to the
(c) Day Book (a) Debit side of the purchases account
(d) Proper Book (b) Debit side of the purchase returns account
(c) Credit side of the purchases account
3. Debit Note Sent to (d) Credit side of the purchase returns account
(a) Debtors
(b) Creditors 10. Purchases Book is used to record
(c) Bank (a) all purchases of goods
(d) Consignor (b) all credit purchases
(c) all credit purchases of goods
4. Purchase of Electric Kettles on account by (d) all credit purchases of assets other than goods
Electric Appliance Co. is recorded in
(a) Journal 11. Sales Book records
(b) Purchase Book (a) Cost sales
(c) Cash Book (b) Sales of assets on credit
(d) Appliance Account (c) Sales of goods on credit
(d) Sales of loose tools
5. The total of the Sales Book for a month
indicates the total………………for the month 12. Sales Book is used to record
(a) Sales (a) all credit sales
(b) Cash sales (b) all sales of goods
(c) Credit sales (c) all credit sales of goods
(d) Sales less sales returns (d) all credit sales of assets other than goods

6. A return inward book is kept to record 13. Journal proper is used to record
(a) Coming of all the employees (a) all cash purchases, of assets other than goods
(b) Sales return (b) all cash sales of assets other than goods
(c) Purchase return (c) Returns of fixed assets purchased on credit
(d) Employees joining back who had left the (d) Recovery of an amount already written off as
organization bad debts

7. Sales day book record 14. Purchases Returns Book is used to record
(a) Only Credit sales of trading goods (a) Returns of goods purchased for cash
(b) Cash sales of trading goods (b) Returns of fixed assets purchased on credit
(c) Sales of all types including Capital goods (c) Returns of goods purchased on credit
(d) None of these (d) None of these

Compiled by: Aastik Dave

15. Sales Returns Book is used to record (b) A book of original entry
(a) Returns of fixed assets sold on credit (c) Journal as well as ledger
(b) Returns of goods sold for cash (d) All of these
(c) Returns of goods sold on credit
(d) None of these 23. The total of Return Inward Book is posted to
(a) Sales account
16. The source document used for recording entries in (b) Purchase return account
Sales Book is (c) Sales Return account
(a) Invoice received (d) Individual account of customers
(b) Invoice sent out
(c) Credit notes sent out 24. Closing entries are recorded in
(d) Debit notes received (a) Cash Book
(b) Ledger
17. Bills Receivable Book is a part of the (c) Journal Proper
(a) Ledger (d) Balance Sheet
(b) Balance Sheet
(c) Journal 25. When a customer returns the goods
(d) Profit and Loss Account (a) an invoice is sent to him
(b) a debit Note is sent to him
18. Credit Note is sent to (c) a credit Notes is sent to him
(a) Debtors (d) only Invoice is return
(b) Creditors
(c) Bank 26. When the goods are sent to a supplier
(d) Consigner (a) all invoice is sent to him
(b) a debit note is sent to him
19. How does an over-casting of Purchase Day Book (c) a credit note is sent to him
affect the cost of sales and profit? (d) none of the above
(a) Cost of sales is decreased while profit is
increased 27. The total of journal proper will be debited to
(b) Cost of sales is increased while profit is (a) Cash account
decreased (b) Customer’s account
(c) Both cost of sales and profit are increased (c) Supplier’s account
(d) Cost of sales is increased, gross profit is (d) None of these
decreased, but net profit remains
unaffected 28. The special journal may be sub-divided into
(a) Purchase Book
20. The debit notes issued are used to prepare (b) Sales Return Book
(a) Sales Book (c) Cash Book
(b) Sales Return Book (d) All of the above
(c) Purchase Return Book
(d) Purchase Book 29. Return of goods purchased
(a) Return Note and Purchase Book
21. The following is a book of original entry and also (b) Debit Note and Purchase Return Book
part of the ledger (c) Credit Note and Purchase Book
(a) the journal (d) Debit Note and Purchase Book
(b) the cash book
(c) the purchase book 30. Credit sale of goods
(d) the sales book (a) Sales Invoice and Journal Proper
(b) Credit Note and Sales Book
22. Cash Book is (c) Sales Invoice and Cash Memo
(a) Ledger account (d) Sales Invoice and Sales Book
Compiled by: Aastik Dave
31. Return of goods sold
(a) Debit Note and Sales Returns Book
(b) Credit Note and Sales Returns Book
(c) Credit Note and Sales Book
(d) Debit Note and Journal Proper
32. The periodic total of Purchase return Day book
is posted to
(a) Credit side of purchase a/c
(b) Credit side of Creditors a/c
(c) Credit side of purchase account
(d) Debit side of Trading account
33. Bad debts written off
(a) Journal Voucher and Journal Proper
(b) Journal voucher and Sales Book
(c) Debit Note and Journal Proper
(d) Credit Note and Journal Proper
34. The following is entered in the journal proper
(a) Purchase of an asset for cash
(b) Purchase of an asset on credit
(c) Purchase of goods for cash
(d) Purchase of goods on credit
35. Bills Receivable book is kept for recording
(a) Bills Receivable
(b) Bills Payable
(c) Bill sent for collection
(d) Endorsed Bills Receivable
36. A customer’s cheque returned dishonoured is
recorded in
(a) Purchase Return Book
(b) Sales Return Book
(c) Cash Book
(d) Journal
37. Use of Subsidiary book can be made by
(a) Only large business concerns
(b) Only small business concerns
(c) All type of business concerns
(d) None of these
38. Which of the following would record the sale of
a business asset on credit?
(a) Cash Book
(b) Sales Journal
(c) Sales Account
(d) Journal Proper
39. A buyer returning goods on the ground of poor
quality send a note along with the goods stating
that no payment would be made in respect of
goods returned, the returned note is called
(a) Debit Note
(b) Credit Note
(c) Refund Note
(d) Return Note
40. The following is entered in the Journal proper
(a) Trade Discount Allowed
(b) Trade Discount Received
(c) Cash Discount Allowed
(d) Opening Entry
41. A seller received the return goods and sending
note to the party who return the goods, the
note is called
(a) Debit note
(b) Credit note
(c) Refund note
(d) Return note
42. The periodical total of the Sales Return Book is
posted to the
(a) Credit of Sales account
(b) Debit of Sales account
(c) Debit of Sales Return account
(d) Credit of Sales Return account
43. The periodic total of purchase day book is
posted to
(a) Credit side of Sales A/c
(b) Credit side of creditors a/c
(c) Debit side of trading a/c
(d) Debit side of purchase a/c
44. Credit purchase of goods effect
(a) Purchase Invoice and Purchase Book
(b) Cash Memo and Purchase Book
(c) Purchase Invoice and Cash Book
(d) Expense Voucher and Purchase Book
45. The periodic total of sales day book is posted to
(a) Credit side of purchase return a/c
(b) Credit side of purchase a/c
(c) Credit side of trading a/c
(d) Credit side of sales a/c
Compiled by: Aastik Dave
46. The periodic total of sales return day book is 53. Which of the following books will be used to
posted to record purchase of furniture on credit
(a) Credit side of purchase return a/c (a) Cash Book
(b) Credit side of sales a/c (b) Sales Book
(c) Credit side of trading a/c (c) Purchase Book
(d) Debit side of sales return a/c (d) Journal Proper

47. XYZ Ltd. makes purchases on credit. If the 54. Where would the purchase of a typewriter for
purchases are not as per the specifications, the cash be recorded
company returns them to the suppliers. The (a) Cash Book
book, that is used to record such return is (b) Sales Book
(a) Return inward book (c) Purchase Book
(b) Return outward book (d) Journal
(c) Cash book
(d) Journal Proper 55. Cash sales is recorded in
(a) Cash book
48. When the purchases day book of a firm is (b) Sales book
overcast, it will (c) Journal
(a) Increase gross profit and reduce net profit (d) None of the above
(b) Reduce gross profit and increase net profit
(c) Reduce gross profit as well as net profit 56. Bills payable Book is a part of
(d) Increase gross profit as well as net profit (a) Balance Sheet
(b) Journal
49. Purchase of fixed assets on credit is originally (c) Ledger
recorded in (d) P & L A/c
(a) Purchase Book
(b) Ledger 57. Returns inward from Ravi would be entered in
(c) Cash Book (a) Journal
(d) Journal Proper (b) Purchases Return Book
(c) Sales Return Book
50. In which of the following would an adjusting (d) Ledger
entry for depreciation be made?
(a) Cash Book 58. Excise duty is ……………while ascertaining the
(b) Journal price to be recorded in Day Book
(c) Sales Book (a) Added
(d) Purchase Book (b) Deducted
(c) Ignored
51. Purchase of merchandise on account would be (d) None of the above
recorded in
(a) Journal 59. Total of the Sales Book for March indicates
(b) Cash Book (a) The total sales for the month
(c) Sales Book (b) Total credit sales for the month
(d) Purchase Book (c) Total cash sales for the month
(d) Total sales less sales return
52. Which of the following would record a
customer's cheque returned dishonoured? 60. Who can make use of subsidiary books?
(a) Purchases Return Book (a) Only large business concerns
(b) Sales Return Book (b) Only huge multinationals
(c) Journal (c) Only small units
(d) Cash Book (d) A II types of business units

Compiled by: Aastik Dave

61. Goods, the payment of which is the due after 3 (a) Buyer
months, were sold to ABC Ltd (b) Seller
(a) Cash Book (c) Banker
(b) Purchase Book (d) None of the above
(c) Sales Book
(d) Creditor's Ledger 67. Sales Book records ……………… sales for a period
(a) Cash
62. Goods sold for Cash were returned by a (b) Credit
customer but cash was not given immediately, (c) Total
entered in (d) None of the above
(a) Cash Book
(b) Journal Proper 68. Goods sold for cash were not given immediately
(c) Sales Book (a) Journal Proper
(d) Sales Return Book (b) Sales Return Book
(c) Cash Book
(d) Sales Return Book and Cash Book
63. While posting the Purchases book
(a) Only the total of the Purchases book is 69. Credit Sales are recorded in Sales Book after
posted to the debit of the Purchases A/c ………… trade discount from catalogue price
(b) Only the suppliers' accounts are credited (a) Adding
with their respective amounts (b) Deducting
(c) The suppliers's accounts are debited and (c) Ignoring
the total or the Purchase book posted to (d) None of the above
the credit of the Purchases A/c
(d) The total of the Purchases book is posted to 70. Credit purchase of stationery worth Rs. 500 by a
the debit of the Purchases Alc and the suppl stationary dealer from Mr. Suresh
iers individual accounts are credited with (a) Cash book
their respective amounts (b) Purchase Book
(c) Journal proper
64. Which of the following statements is/are true? (d) None of these
(a) The sale of an asset is recorded in the sales
book 71. Accounting the partial recovery from Mr. X of
(b) Total of return outward book is debited to an amount of Rs. 20,000 earlier written of an a
return outward account bad debt
(c) The balance of petty cash book is a liability (a) Cash Book
(d) Cash book is a subsidiary book as well as a (b) Journal Proper
ledger (c) Bad Debts Book
(d) None of these
65. Which of the following transactions of a
business is/are recorded in journal proper? 72. Rent paid by cheque
i. Discounting of bill of exchange with a bank (a) Cash Book
ii. Purchase of goods on credit (b) Pass Book
iii. Sale of office furniture for cash (c) Expense Book
iv. Endorsement or a bill of exchange in (d) Journal Proper
settlement of debt of the business
(a) Only (i) above 73. Discount allowed for a prompt payment
(b) Only (iv) above received by a concern
(c) Both (ii) and (iv) (a) Cash Book
(d) (i), (ii) and (iv) above (b) Bank Book
(c) Pass Book
66. Credit Note is sent by (d) Journal Proper
Compiled by: Aastik Dave
 (a) Purchase account
74. An allowance of Rs. 50 was offered for the early (b) Purchase return account
payment of cash of Rs. 1,550 (c) Sales Book
(a) Cash Book (d) Journal Proper
(b) Bank Book
(c) Pass Book 78. Empty cylinders, charged earlier to customers,
(d) Journal Proper now received bank from him
(a) Purchase Book
75. Goods the payment of which is the due after 3 (b) Sales Book
months, were sold to Mr. Tendulkar & Co. for (c) Journal Proper
Rs. 5,00,000 (d) None of the above
(a) Cash Book
(b) Purchase Book 79. Goods purchased from Mr. Z, the payment for
(c) Sales Book which is due after two months
(d) Journal Proper (a) Purchase Book
(b) Purchase Return Book
76. Goods received from the manufactures for (c) Journal Proper
distribution among the customer as free sample (d) None of these
(a) Sales Book
(b) Sales Adjustment Book 80. Purchase return book records
(c) Advertisement Book (a) Cash purchase
(d) Journal Proper (b) Credit sales
(c) Return of goods
77. Rectifying the error of credit purchase of goods (d) Return of goods purchased on credit
worth Rs. 50,000 recorded as credit sales to Mr.
X discovered three months later

Answer Key:
1.(b) 2.(b) 3.(b) 4.(b) 5.(c) 6.(b) 7.(a) 8.(b) 9.(a) 10.(c)
11.(c) 12.(c) 13.(c) 14.(c) 15.(c) 16.(b) 17.(c) 18.(a) 19.(b) 20.(c)
21.(b) 22.(d) 23.(c) 24.(c) 25.(c) 26.(b) 27.(d) 28.(d) 29.(b) 30.(d)
31.(b) 32.(a) 33.(a) 34.(b) 35.(a) 36.(d) 37.(a) 38.(d) 39.(a) 40.(d)
41.(b) 42.(c) 43.(d) 44.(a) 45.(d) 46.(d) 47.(b) 48.(c) 49.(d) 50.(b)
51.(d) 52.(d) 53.(d) 54.(a) 55.(a) 56.(b) 57.(c) 58.(a) 59.(b) 60.(d)
61.(c) 62.(b) 63.(d) 64.(d) 65.(b) 66.(b) 67.(b) 68.(c) 69.(b) 70.(b)
71.(a) 72.(a) 73.(a) 74.(a) 75.(c) 76.(d) 77.(d) 78.(c) 79.(a) 80.(d)

Compiled by: Aastik Dave