MCQ Questions for Class 11 Accountancy with Answers: Financial Accounting

Lesson 1. Introduction to Accounting 

Q1. Which is the last step of accounting as a process of information?

(i) Recording of data in the books of accounts

(ii) Preparation of summaries in the form of financial statements
(iii) Communication of information
(iv) Analysis and interpretation of information

Q2. Goodwill account is a

(i) Personal Account.

(ii) Real Account.
(iii) Nominal Account.
(iv) None of these.

Q3. Internal users of accounting information are :

(i) Creditors
(ii) Potential investors
(iii) Managers
(iv) Researchers

Q4. Cash, goods or assets invested by the proprietor in the business for earning profit is called-

(i) Profit
(ii) Capital
(iii) Fixed assets
(iv) None of these.

Q5. Use of common unit of measurement and common format of reporting promotes

(i) Comparability
(ii) Understandability
(iii) Relevance
(iv) Reliability

Q6. Basic function of financial accounting is to

(i) record all business transactions.

(ii) interpret financial data.
(iii) assist the management.
(iv) None of these.

Q7. The Pioneer of Accounting is:

(i) Arthur Field House

(ii) Gitman
(iii) William Pickles
(iv) Lucas Pacioli

Q8. Book – keeping is-

(i) An art
(ii) A science
(iii) An art and science both
(iv) None of these.

Q9. Which of the following is not a business transaction?

(i) Bought furniture of Rs. 10,000 for business

(ii) Paid for salaries of employees Rs. 5,000
(iii) Paid sons fees from her personal bank account Rs. 20,000
(iv) Paid sons fees from the business Rs. 2,000

Q10. Which of the following accounts has a credit balance?

(i) Carriage Inward

(ii) Discount Received
(iii) Carriage Outward
(iv) Discount Allowed

Q11. Management accounting provides valuable services to management in performing

(i) All management functions

(ii) Controlling functions
(iii) Coordinating management functions
(iv) None of these

Q12. The art of recording all business transactions in a systematic manner in a set of books is
called-

(i) Accounting
(ii) Book – keeping
(iii) Ledger
(iv) None of these.

Q13. Which qualitative characteristics of accounting information is reflected when accounting

information is clearly presented?

(i) Understandability
(ii) Relevance
(iii) Comparability
(iv) Reliability

Q14. Which of the following will not be recorded in the books of account?

(i) Sales of goods

(ii) Payment of salary
(iii) Quality of staff
(iv) Purchase of Goods

Q15. Discounts received are

(i) Buyer of goods granted discount by seller

(ii) Deducted when we receive cash
(iii) Given by us when we sell goods on credit
(iv) None of these

Q16. The process of recording, classifying and summarizing all business transactions in order to
know the financial result is called –
(i) Book – keeping
(ii)Accounting
(iii) Journalizing
(iv) None of these.

Q17. Which of the following limitations of accounting states that accounts may be manipulated to
conceal vital facts :

(i) Accounting is not fully exact

(ii) Accounting may lead to window dressing
(iii) Accounting ignores price level changes
(iv) Accounting ignores qualitative elements

Q18. The unsold merchandise of business on particular day is called

(i) Purchase Return

(ii) Stock / Inventory
(iii) Bad Debts
(iv) Sales Return

Q19. Drawings Account is a

(i) Personal Account.

(ii) Real Account.
(iii) Nominal Account.
(iv) None of these.

Q20. Accounting is the language of

(i) Government
(ii) Commerce
(iii) Trade
(iv) Business

Q21. Out of the following assets, which one is not an intangible asset?

(i) Machinery
(ii) Patents
(iii) Goodwill
(iv) Trade Mark

Q22. Use of common unit of measurement and common format of reporting promotes

(i) Comparability
(ii) Understandability
(iii) Relevance
(iv) Reliability

Q23. Which is the last step of accounting as a process of information?

(a) Recording of data in the books of accounts

(b) Preparation of summaries in the form of financial statements
(c) Communication of information
(d) Analysis and interpretation of information

Q24. Which qualitative characteristics of accounting information is reflected when accounting

information is clearly presented?
(a) Understandability
(b) Relevance
(c) Comparability
(d) Reliability

Q25. Use of common unit of measurement and common format of reporting promotes

(a) Comparability
(b) Understandability
(c) Relevance
(d) Reliability

Q26. The process of recording, classifying and summarizing all business transactions in order to
know the financial result is called –

(a) Book – keeping

(b)Accounting
(c) Journalizing
(d) None of these.

Q27. Cash, goods or assets invested by the proprietor in the business for earning profit is called-

(a) Profit
(b) Capital
(c) Fixed assets
(d) None of these.

Q28. The person, firm or institution who does not pay the price in cash for the goods purchased or
the services received is called-

(a) Creditor
(b) Proprietor
(c) Debtor
(d)None of these.

Q29. Basic function of financial accounting is to

(i) record all business transactions.

(ii) interpret financial data.
(iii) assist the management.
(iv) None of these.

Show Answer
Q30. The Pioneer of Accounting is:

(i) Arthur Field House

(ii) Gitman
(iii) William Pickles
(iv) Lucas Pacioli

Q31. Which of the following is not a business transaction?

(i) Bought furniture of Rs. 10,000 for business

(ii) Paid for salaries of employees Rs. 5,000
(iii) Paid sons fees from her personal bank account Rs. 20,000
(iv) Paid sons fees from the business Rs. 2,000

Q32. Which of the following accounts has a credit balance?

(i) Carriage Inward

(ii) Discount Received
(iii) Carriage Outward
(iv) Discount Allowed

Q33. Management accounting provides valuable services to management in performing

(i) All management functions

(ii) Controlling functions
(iii) Coordinating management functions
(iv) None of these

Q34. Which qualitative characteristics of accounting information is reflected when accounting

information is clearly presented?

(i) Understandability
(ii) Relevance
(iii) Comparability
(iv) Reliability

Q35.Which of the following will not be recorded in the books of account?

(i) Sales of goods

(ii) Payment of salary
(iii) Quality of staff
(iv) Purchase of Goods

Q36.Discounts received are

(i) Buyer of goods granted discount by seller

(ii) Deducted when we receive cash
(iii) Given by us when we sell goods on credit
(iv) None of these

Q37. Which of the following limitations of accounting states that accounts may be manipulated to
conceal vital facts :

(i) Accounting is not fully exact

(ii) Accounting may lead to window dressing
(iii) Accounting ignores price level changes
(iv) Accounting ignores qualitative elements

Q38. The unsold merchandise of business on particular day is called

(i) Purchase Return

(ii) Stock / Inventory
(iii) Bad Debts
(iv) Sales Return

Q39. Drawings Account is a

(i) Personal Account.
(ii) Real Account.
(iii) Nominal Account.
(iv) None of these.

Q40. Out of the following assets, which one is not an intangible asset?

(i) Machinery
(ii) Patents
(iii) Goodwill
(iv) Trade Mark

Lesson 2. Theory Base of Accounting 

Q1. The primary qualities that make accounting information useful for decision-making are

(i) Relevance and freedom from bias

(ii) Reliability and comparability
(iii) Comparability and consistency
(iv) None of the above

Q2. According to the Cost Concept

(i) Assets are recorded at lower of cost and market value.

(ii) Assets are recorded by estimating the market value at the time of purchase.
(iii) Assets are recorded at the value paid for acquiring it.
(iv) Assets are not recorded

Q3. The Trading and Profit and Loss Account is prepared under which attribute of accounting:

(i) Summarising
(ii) Recording
(iii) Classifying
(iv) Analysis and Interpretation

Q4. Meaning of credibility of going concern is:

(i) Closing of business

(ii) Opening of business
(iii) Continuing of business
(iv) None of these.

Q5. A concept that a business enterprise will not be sold or liquidated in the near future is known
as :

(i) Going concern

(ii) Economic entity
(iii) Monetary unit
(iv) None of the above

Q6. Convention of conservatism takes into account:

(i) All future profits and losses

(ii) All future profits and not losses
(iii) All future losses and not profits
(iv) Neither profits nor losses of the future

Q7. Which of the following statements is correct:

(i) Book Keeping is a part of Accounting.

(ii) Accounting is a part of book-keeping.
(iii) The term book-keeping and accounting can be used interchangeably.
(iv) Book keeping is not a part of accounting.

Q8. The amount drawn by businessmen for his personal use is-

(i) Capital
(ii) Drawing
(iii) Expenditure
(iv) Loss.

Q9. When information about two difference enterprises have been prepared presented in a similar
manner the information exhibits the characteristic of:

(i) Verifiability
(ii) Relevance
(iii) Reliability
(iv) None of the above

Q10. As per Income Tax Act, accounting period is :

(i) From 1st January to 31st December

(ii) From 1st April to 31st March
(iii) From 1st July to 30th June
(iv) From Diwali to Diwali

Q11. IFRS are:

(i) Principles based accounting standards

(ii) Rule based accounting standards
(iii) Partially rule and partially principles
(iv) None of the options

Q12. The basic accounting postulates are denoted by

(i) Concepts
(ii) Book – keeping
(iii) Accounting standards
(iv) None of these.

Q13. During the lifetime of an entity accounting produce financial statements in accordance with
which basic accounting concept:

(i) Conservation
(ii) Matching
(iii) Accounting period
(iv) None of the above

Q14. As per Dual Aspect Concept:

(i) Assets = Liabilities – Capital

(ii) Assets = Capital – Liabilities
(iii) Assets = Liabilities + Capital
(iv) Capital = Assets + Liabilities

Q15. A liability arises because of:

(i) Credit transaction

(ii) Cash transaction
(iii) None of the options
(iv) Cash and credit transaction

Q16. In India, the accounting standard board was set up in the year-

(i) 1972
(ii) 1977
(iii) 1956
(iv) 1932.

Q17. Which of these is not a fundamental accounting assumption?

(i) Going concern

(ii) Consistency
(iii) Accrual
(iv) Materiality

Q18. Which of the following limitations of accounting states that accounts may be manipulated to
conceal vital information?

(i) Accounting leads to window dressing

(ii) Accounting is not fully exact
(iii) Accounting ignores price level changes.
(iv) Accounting ignores qualitative concepts.

Q19. As per Income Tax Act, accounting period is :

(i) From 1st January to 31st December

(ii) From 1st April to 31st March
(iii) From 1st July to 30th June
(iv) From Diwali to Diwali

Q20. Return Inward is the term used for:

(i) Sales Return

(ii) Purchase Return
(iii) Credit purchase
(iv) Credit Sales

Q21. IASB upon coming into existence has adopted

(i) all IAS and SIC.

(ii) some IAS and SIC.
(e) none of the IAS and SIC.
(iv) None of these.

Q22. Among the following assets, which one is fictitious asset?

(i) Debit balance of Profit &loss A/c

(ii) Goodwill
(iii) Patents
(iv) Oil wells

Q23. The Trading and Profit and Loss Account is prepared under which attribute of accounting:

a) Summarising
b) Recording
c) Classifying
d) Analysis and Interpretation

Q24. Identified and measured economic events should be recorded in _ order.

a) Chronological
b) Financial
c) Proper
d) Monetary

Q25.Which of the following statements is correct:

a) Book Keeping is a part of Accounting.

b) Accounting is a part of book-keeping.
c) The term book-keeping and accounting can be used interchangeably.
d) Book keeping is not a part of accounting.

Q26. IFRS (International Financial reporting standards) are based on:

a) Fair value
b) Historical cost
c) Both historical cost and fair value.
d) None of the options

Q27. IAS adopted by IASB and still in force are:

a) 29
b) 41
c) 9
d) 10

Q28. IASB (International Accounting Standards Board) upon coming into existence has adopted:

a) All IAS and SIC (Standing Interpretation Board)

b) Some IAS and SIC
c) None of the options
d) None of the IAS and SIC

Q29. Which one of the following statement is correct?

a) Income = Revenue- Expenses.

b) Income = Expenses – Revenue.
c) Expenses = Income – Revenue.
d) Income= Profits – Expenses.

Q30. The sum of Liabilities and Capital is-

(a) Expense
(b) Income
(c) Drawings
(d) Assets.

Q31. In India, the accounting standard board was set up in the year-

(a) 1972
(b) 1977
(c) 1956
(d) 1932.

Q32. The basic accounting postulates are denoted by –

(a) Concepts
(b) Book – keeping
(c) Accounting standards
(d) None of these.

Q33. The amount drawn by businessmen for his personal use is-

(a) Capital
(b) Drawing
(c) Expenditure
(d) Loss.

Q34. Meaning of credibility of going concern is :

(a) Closing of business

(b) Opening of business
(c) Continuing of business
(d) None of these.

Q35. During the lifetime of an entity accounting produce financial statements in accordance with
which basic accounting concept:

(a) Conservation
(b) Matching
(c) Accounting period
(d) None of the above

Q36. When information about two difference enterprises have been prepared presented in a
similar manner the information exhibits the characteristic of:

(a) Verifiability
(b) Relevance
(c) Reliability
(d) None of the above
Q37. A concept that a business enterprise will not be sold or liquidated in the near future is known
as :

(a) Going concern

(b) Economic entity
(c) Monetary unit
(d) None of the above

Q38. The primary qualities that make accounting information useful for decision-making are

(a) Relevance and freedom from bias

(b) Reliability and comparability
(c) Comparability and consistency
(d) None of the above

Q39. The primary qualities that make accounting information useful for decision-making are

(i) Relevance and freedom from bias

(ii) Reliability and comparability
(iii) Comparability and consistency
(iv) None of the above

Q40. According to the Cost Concept

(i) Assets are recorded at lower of cost and market value.

(ii) Assets are recorded by estimating the market value at the time of purchase.
(iii) Assets are recorded at the value paid for acquiring it.
(iv) Assets are not recorded

Q41. The Trading and Profit and Loss Account is prepared under which attribute of accounting:

(i) Summarising
(ii) Recording
(iii) Classifying
(iv) Analysis and Interpretation

Q42. Meaning of credibility of going concern is:

(i) Closing of business

(ii) Opening of business
(iii) Continuing of business
(iv) None of these.

Q43. A concept that a business enterprise will not be sold or liquidated in the near future is known
as :

(i) Going concern

(ii) Economic entity
(iii) Monetary unit
(iv) None of the above

Q44. Convention of conservatism takes into account:

(i) All future profits and losses

(ii) All future profits and not losses
(iii) All future losses and not profits
(iv) Neither profits nor losses of the future

Q45. Which of the following statements is correct:

(i) Book Keeping is a part of Accounting

(ii) Accounting is a part of book-keeping..
(iii) The term book-keeping and accounting can be used interchangeably.
(iv) Book keeping is not a part of accounting.

Q46. When information about two difference enterprises have been prepared presented in a
similar manner the information exhibits the characteristic of:

(i) Verifiability
(ii) Relevance
(iii) Reliability
(iv) None of the above

Q47. As per Income Tax Act, accounting period is :

(i) From 1st January to 31st December

(ii) From 1st April to 31st March
(iii) From 1st July to 30th June
(iv) From Diwali to Diwali

Q48. IFRS are:

(i) Principles based accounting standards

(ii) Rule based accounting standards
(iii) Partially rule and partially principles
(iv) None of the options

Q49. The basic accounting postulates are denoted by

(i) Concepts
(ii) Book – keeping
(iii) Accounting standards
(iv) None of these.

Q50. During the lifetime of an entity accounting produce financial statements in accordance with
which basic accounting concept:

(i) Conservation
(ii) Matching
(iii) Accounting period
(iv) None of the above

Q51. A liability arises because of:

(i) Credit transaction

(ii) Cash transaction
(iii) None of the options
(iv) Cash and credit transaction
Q52. In India, the accounting standard board was set up in the year-

(i) 1972
(ii) 1977
(iii) 1956
(iv) 1932.

Q53. Which of these is not a fundamental accounting assumption?

(i) Going concern

(ii) Consistency
(iii) Accrual
(iv) Materiality

Q54. Which of the following limitations of accounting states that accounts may be manipulated to
conceal vital information?

(i) Accounting leads to window dressing

(ii) Accounting is not fully exact
(iii) Accounting ignores price level changes.
(iv) Accounting ignores qualitative concepts.

Q55. Return Inward is the term used for:

(i) Sales Return

(ii) Purchase Return
(iii) Credit purchase
(iv) Credit Sales

Q56. IASB upon coming into existence has adopted

(i) all IAS and SIC.

(ii) some IAS and SIC.
(e) none of the IAS and SIC.
(iv) None of these.

Q57. Among the following assets, which one is fictitious asset?

(i) Debit balance of Profit &loss A/c

(ii) Goodwill
(iii) Patents
(iv) Oil wells

Lesson 3. Recording of Transactions 

Q1. The process of recording a business transaction in the journal is called

(i) Costing
(ii) Balancing
(iii) Posting
(iv) Journalising
Q2. The Sales Book is a part of:

(i) Journal
(ii) Trading A/c
(iii) Balance Sheet
(iv) Ledger

Q3. Which account will be debited in case wages are paid for installation of machinery?

(i) Machinery A/c

(ii) Installation A/c
(iii) Wages A/c
(iv) Cash A/c

Q4. How many columns are there in a Ledger (in one side)

(i) Six
(ii) Four
(iii) Five
(iv) Seven.

Show Answer

Q5. The following account has a debit balance

(i) Creditor’s A/c

(ii) Capital A/c
(iii) Building A/c
(iv) Loan A/c

Q6. Which account will be debited in case wages are paid for installation of machinery?

(i) Machinery A/c

(ii) Installation A/c
(iii) Wages A/c
(iv) Cash A/c

Q7. Name the transaction that is recorded in both sides of Cash book simultaneously.

(i) Contra Entry

(ii) Dual entry
(iii) Double entry
(iv) Single entry

Q8. The balance of good’s Account is transferred to-

(i) Profit and loss Account

(ii) Trading Account
(iii) Balance sheet
(iv) None of these.

Q9. Journal is a book of in accounting.

(i) All non-cash transactions
(ii) Secondary entry
(iii) Original entry
(iv) All cash transaction.

Q10. All the indirect expenses are closed to

(i) Profit and loss A/c

(ii) Cash Flow Statement
(iii) Balance sheet
(iv) Trading A/c

Q11. Journal proper includes entries related to

(i) Sale of asset on credit

(ii) Sale of asset for cash
(iii) Sale of goods for cash
(iv) Sale of goods on credit

Q12. What statement is used while closing a Drawing Account-

(i) Balance c/d

(ii) By Trading A/c
(iii) By P & L A/c
(iv) By Capital Account.

Q13. If a film borrows a sum of money, there will be

(i) Increase in capital

(ii) Decrease in capital
(iii) No effect on capital
(iv) None of the above

Q14. Payment to a creditor means

(i) Increase in asset and decrease in liability.

(ii) Decrease in asset and decrease in liability.
(iii) Decrease in asset and increase in liability.
(iv) Increase in asset and increase in liability.

Q15. A credit balance in Bank column of cash book indicates

(i) Overdraft
(ii) Expense.
(iii) Loss
(iv) Profit

Q16. The cash – book meant for recording petty expenses is called –

(i) Simple cash – book

(ii) Petty cash – book
(iii) Triple column
(iv) None of these.

Q17. Which of the following equation’s correct?

(i) Assets = Liabilities – Capital
(ii) Assets = Capital – Liabilities
(iii) Assets = Liabilities + Capital
(iv) Assets = External Equities

Show Answer

Q18. Withdrawal of cash from business by the proprietor is credited to

(i) Drawings A/c.

(ii) Capital A/c.
(iii) Cash A/c.
(iv) Bank A/c.

Q19. Which of the following account will be credited on giving cash donations?

(i) Cash A/c

(ii) Purchases A/c
(iii) Bank A/c
(iv) Donation A/c

Q20. Which of the following is entered in cash – book-

(i) Only cash transactions

(ii) Only credit transactions
(iii) Both cash and credit transactions
(iv) None of these.

Q21. Amount withdrawn by proprietor for personal use will … Cash and Capital.

(i) Increase.
(ii) Decrease.
(iii) Not Change.
(iv) None of these.

Q22. A ledger is prepared from

(i) Journal
(ii) None of the options
(iii) Transactions
(iv) Events

Q23. The basis of recording transactions is-

(i) Vouchers
(ii) Profit
(iii) Order form
(iv) Quotation list.

Q24. The Sales Book is a part of:

(a) Journal
(b) Trading A/c
(c) Balance Sheet
(d) Ledger

Q25. While passing an opening entry, all the assets are______while all the liabilities are_____
(a) Debited , credited
(b) Credited, Credited
(c) None of the options
(d) Credited, Debited

Q26. Which account will be debited in case wages are paid for installation of machinery?

(a) Machinery A/c

(b) Installation A/c
(c) Wages A/c
(d) Cash A/c

Q27. Goods worth Rs.7,000 given away as charity would be credited to :

(a) Sales A/c

(b) Purchases A/c
(c) Charity A/c
(d) Trustee A/c

Q28. What are total number of subsidiary books available to record financial transactions?

(a) 8
(b) 7
(c) 6
(d) 12

Q29. Name the transaction that is recorded in both sides of Cash book simultaneously.

(a) Contra Entry

(b) Dual entry
(c) Double entry
(d) Single entry

Q30. All the indirect expenses are closed to_____

(a) Profit and loss A/c

(b) Cash Flow Statement
(c) Balance sheet
(d) Trading A/c

Q31. Which accounting equation is incorrect out of the following?

(a) Liabilities = Assets – Capital.

(b) Assets = Liabilities – Capital.
(c) Capital = Assets – Liabilities.
(d) Assets = Liabilities + Capital.

Q32. Journal proper includes entries related to______

(a) Sale of asset on credit

(b) Sale of asset for cash
(c) Sale of goods for cash
(d) Sale of goods on credit

Q33. Business transactions are recorded

(a) in chronological order.
(b) weekly.
(c) at the end of the month.
(d) All of these.

Q34. Withdrawal of cash from business by the proprietor is credited to

(a) Drawings A/c.

(b) Capital A/c.
(c) Cash A/c.
(d) Bank A/c.

Q35. X sells goods on credit to Y. He receives 10% trade discount from X and a further 5% cash
discount if paid within 15 days. K bought goods with a list price of Rs. 2,00,000 from X.
Which of the following Journal entry would correctly record the sale in the books of A?

(a) Dr. y and Cr. Sales A/c by Rs. 1,70,000.

(b) Dr. Y and Cr. Sales A/c by Rs. 1,80,000.
(c) Dr. X and Cr. Sales A/c by Rs. 1,90,000.
(d) Dr. X by Rs. 2,00,000; Cr. Sales A/c by Rs. 1,70,000 and Discount A/c by Rs. 30,000.

Q36. Liabilities and Assets amount to Rs. 50,000 and Rs. 7,800 respectively. The difference Amount
shall represent-

(a) Creditors
(b) Debentures
(c) Profit
(d) Capital.

Q37. The basis of recording transactions is-

(a) Vouchers
(b) Profit
(c) Order form
(d) Quotation list.

Q38. As per American Belief, Accounts are of how many types-

(a) Two
(b) Three
(c) Five
(d) Four.

Q39. Which of the following is entered in cash – book-

(a) Only cash transactions

(b) Only credit transactions
(c) Both cash and credit transactions
(d) None of these.

Q40. Cash – book always show-

(a) Debit balance

(b) Credit balance
(c) Debit or Credit balance
(d) None of these.
Q41. The cash – book meant for recording petty expenses is called –

(a) Simple cash – book

(b) Petty cash – book
(c) Triple column
(d) None of these.

Q42. The liabilities of a firm are Rs. 60,000 and the capital of the proprietor is Rs. 40,000. The total
assets are:

(a) 60,000
(b) 1,00,000
(c) 20,000
(d) 40,000

Q43. If a film borrows a sum of money, there will be

(a) Increase in capital

(b) Decrease in capital
(c) No effect on capital
(d) None of the above

Q44. Debit Means

(a) an increase in asset

(b) a decrease in asset
(c) an increase in liability
(d) an increase in capital

Q45. How many columns are there in a Ledger (in one side)

(i) Six
(ii) Four
(iii) Five
(iv) Seven.

Q46. The following account has a debit balance

(i) Creditor’s A/c

(ii) Capital A/c
(iii) Building A/c
(iv) Loan A/c

Q47. Which account will be debited in case wages are paid for installation of machinery?

(i) Machinery A/c

(ii) Installation A/c
(iii) Wages A/c
(iv) Cash A/c

Q48. Name the transaction that is recorded in both sides of Cash book simultaneously.

(i) Contra Entry

(ii) Dual entry
(iii) Double entry
(iv) Single entry

Q49. The balance of good’s Account is transferred to-

(i) Profit and loss Account

(ii) Trading Account
(iii) Balance sheet
(iv) None of these.

Q50. Journal is a book of _______in accounting.

(i) All non-cash transactions

(ii) Secondary entry
(iii) Original entry
(iv) All cash transaction.

Q51 All the indirect expenses are closed to

(i) Profit and loss A/c

(ii) Cash Flow Statement
(iii) Balance sheet
(iv) Trading A/c

Q52. Journal proper includes entries related to

(i) Sale of asset on credit

(ii) Sale of asset for cash
(iii) Sale of goods for cash
(iv) Sale of goods on credit

Q53. What statement is used while closing a Drawing Account-

(i) Balance c/d

(ii) By Trading A/c
(iii) By P & L A/c
(iv) By Capital Account.

Q54. If a firm borrows a sum of money, there will be

(i) Increase in capital

(ii) Decrease in capital
(iii) No effect on capital
(iv) None of the above

Q55. Payment to a creditor means

(i) Increase in asset and decrease in liability.

(ii) Decrease in asset and decrease in liability.
(iii) Decrease in asset and increase in liability.
(iv) Increase in asset and increase in liability.

Q56. A credit balance in Bank column of cash book indicates

(i) Overdraft
(ii) Expense.
(iii) Loss
(iv) Profit

Q57. The cash – book meant for recording petty expenses is called –

(i) Simple cash – book

(ii) Petty cash – book
(iii) Triple column
(iv) None of these.

Q58. Withdrawal of cash from business by the proprietor is credited to

(i) Drawings A/c.

(ii) Capital A/c.
(iii) Cash A/c.
(iv) Bank A/c.

Q59. Which of the following account will be credited on giving cash donations?

(i) Cash A/c

(ii) Purchases A/c
(iii) Bank A/c
(iv) Donation A/c

Q60. Which of the following is entered in cash – book-

(i) Only cash transactions

(ii) Only credit transactions
(iii) Both cash and credit transactions
(iv) None of these.

Q61. Amount withdrawn by proprietor for personal use will … Cash and Capital.

(i) Increase.
(ii) Decrease.
(iii) Not Change.
(iv) None of these.