Accounting For Business Decisions

1. Expenditure for six sigma training of employees is ------

A. Real Account
B. Nominal Account
C. Personal Account
D. None of the above

2. Balance sheet is

A. an account for the year

B. statement for the year
C. statement for the day
D. None of these

3. In final Account of the organisation Profit & Loss Account is

A. Statement for the year

B. Statement for the day
C. Account for the day
D. Account for the year

4. Machinery is the --- Account.

A. Real
B. Personal
C. Nominal
D. None of the above

5. Goodwill is a -----Account.

A. Real
B. Personal
C. Nominal
D. None of the above

6. Economic life of an enterprise is split into the periodic interval as per________ concept.

A. Money Measurement.
B. Matching.
 C. Going concern.
D. Accrual

7. Income tax of proprietor paid by the firm is -------.

A. Expenditure
B. Asset
C. Drawing
D. Capital

8. Capital is the ------ of the business.

A. Asset
B. Income
C. Expenditure
D. None of the Above

9. profit = revenue - expenses - investments + capital

A. Profit
B. Income
C. Asset
D. Liability

10. ------------- of business is nothing but accumulated profits of the business.

A. Reserves and Surplus

B. Depreciation
C. Income tax
D. None of the Above

11. Advance payment of insurance premium is an ------------- of the business.

A. Asset
B. Liability
C. Capital
D. None of the Above

12. Expenditure for six sigma training of employees is --------- to Profit and Loss account

A. Debited
B. Credited
C. None of the Above
13. “Ignore all profit and consider for all possible losses”, it is a philosophy of which convention

A. Conservatism
B. Consistency
C. Full Disclosure
D. Materiality

14. When Assets are Rs 12,000 and Liabilities is Rs 7000, Capital will be…………

A. Rs. 4,000
B. Rs. 12,000
C. Rs. 5,000
D. Rs. 3,000

15. Anything purchase for resale is known as………………

A. Goods
B. Stocks
C. Inventory
D. Assets

16.Every---------- is the owner of the company.

A. Equity Shareholder
B. Preference Shareholder
C. Debenture Holder
D. None of the Above

17. Trading account provides information regarding ………………..

A. Gross Profit or Loss

B. Net Profit or Loss
C. Financial Position
D. All the above.

18. Accounting is best described as:

 A. The collection of financial data
B. The collection and use of financial and non-financial data
C. The collection and use of financial data
D. The use of financial data

19.Which of the following activities is not an accounting function?

A. Costing
B. Taxation
C. Auditing
D. Management consultancy

20. Which of the following statements is incorrect?

A. Liabilities + Assets = Capital

B. Liabilities + Capital = Assets
C. Assets - Capital = Liabilities
D. Assets - Liabilities = Capital

21. Which of the following is not an asset?

A. Loan from K Harris

B. Debtors
C. Buildings
D. Cash balance

22. Which of the following is a liability?

A. Cash at Bank
B. Motor Vehicles
C. Creditors for goods
D. Machinery

23. Which of the following are correct?

A. (i) & (iii)

B. (i) & (ii)
 C. (ii) & (iii)
D. (i), (ii) & (iii)

24. Which of the following is not an accounting concept?

A. Matching Concept
B. Dual Aspect Concept
C. True and Fair Concept
D. Going Concern Concept

25. Rajani sold goods to Rakesh worth Rs. 7,50,000on cash basis at a trade discount of 7% and Cash
discount of 5%, here Rakesh Account will be debited for

A. Rs. 662625.
B. Rs. 750000
C. Rs. 712000
D. None of the above

26.Machinery worth Rs. 8,50,000 is bought and the installation charges paid were Rs.85,000 in this case
the Machinery Account will be debited for

A. Rs.8,50,000.
B. Rs. 9,35,000
C. Rs. 85,000
D. None of the Above

27. Interest paid by Bank on Savings account will be ---------- to Bank Account.

A. Debited
B. Credited
C. None of the Above

28. Which Concept suggests: it is mandatory that every year there must be same method of accounting.

A. Money Measurement.
B. Matching.
C. Going concern.
D. Consistency

29.While preparing the financial statements of an enterprise, the bad debt recovered has to be shown
on the

A. debit side of the profit and loss account.

B. credit side of the profit and loss account.
C. debit side of the trading account.
D. liabilities side of the balance sheet.
30. Which of the following termsDOES NOTrepresent temporaryloans (repayable within a period of one
year)?

A. Cash credit
B. Overdraft
C. Debentures
D. Bills purchased and discounted

31. Investments in Government and other approved securities in India of a banking company are to be
valued at

A. cost.
B. market value.
C. lower of cost or market value.
D. higher of cost or market value.

32.Economic life of an enterprise is split into the periodic interval as per-------------

A. Periodicity

B. Matching

C. Going Concern

D. Accrual

33.This concept requires that those transactions alone that are capable of being measured in terms of
money be only to be recorded in the books of accounts.

A. Matching Concept

B. Dual Aspect Concept

C. Money measurement concept

D. Going Concern Concept

34. This concept helps in keeping business affairs free from the influence of the personal affairs of the
owner.

A. Matching Concept

B. Dual Aspect Concept

C. Entity Concept

D. Going Concern Concept

35. Which concept does mean that the enterprise is liable to the owner for capital investment made by
the owner?

A. Matching Concept

B. Dual Aspect Concept

C. Entity Concept

D. Going Concern Concept

36. A portion of profit which is apportioned to the owner and is immediately payable becomes-------------
--- in the case of corporate entities.

A. Current liability

B. Capital Liability

C. Current Asset

D. Fixed Asset

37.Under -------------------, the effects os transactions and other events are recognized on mercantile
basis.

A. Accrual Concept

B. Dual Aspect Concept

C. Entity Concept

D. Going Concern Concept

38. As per the accrual Concept-------------------------------

A. Capital –Assets = Profit

B. Expenses – Revenue = Profit

C. Gross Profit – Expenses = Net Profit

D. Revenue- Expenses = Profit

39. Which accounting principle differentiates between owners and management

A. Matching Concept

B. Dual Aspect Concept

C. Separate Entity Concept

D. Going Concern Concept

40. The fixed tangible assets in the balance Sheet are recorded at

A. cost.
B. market value.
C. lower of cost or market value.
D. higher of cost or market value.

41. Net loss incurred by the company is

A. Deducted from Capital

B. Added in the capita
C. Recorded as surplus
D. Deducted from Assets

42. The ability of the firm to pay back its short term debts is called as

A. Liquidity
B. Solvency
C. Working capital
D. Current Liabilities

43. The ability of the firm to pay back its long term debts is called as
 A. Liquidity
B. Solvency
C. Working capital
D. Current Liabilities

44. Carriage expenses incurred on transporting the goods from the organization to the outlet of the
organization will be classified as

A. Carriage outward
B. Carriage inward
C. Fright
D. None of the Above

45. Every adjusting entry affects at least one income statement account and one ------------------- account.

A. Balance Sheet

B. Capital

C. Trading account

D. Profit and Loss account

46. Which of the following is an example of an intangible asset?

A. Goodwill
B. Patents
C. Copyrights
D. All of the above

47. A profit making business operating as a separate legal entity and in which ownership is divided into
shares of stock is known as a:

A. Partnership
B. Service Business
C. Company
D. Proprietorship
48. The type of account with a normal credit balance is:

A. an asset
B. a revenue
C. drawing
D. an expense

49. A debit may signify:

A. an increase in a liability account

B. an increase in an asset account
C. a decrease in an asset account
D. an increase in the owner's capital account

50. 1. Book keeping is mainly concerned with

(a) Recording financial data relating to business operation
(b) Designing for systems recording, classifying and summarizing recorded data
(c) Interpreting data for internal & external users
(d) All the above

51. The resources owned by a business are called:

A. Assets
B. Liabilities
C. Owner's Equity
D. The accounting Equation

52. Which of the following accounts would be classified as a current asset on the balance sheet?

A. office equipment
B. accounts receivable
C. land
D. accumulated depreciation

53. . In accounts recording is made of

(a) Only financial transaction
(b) Only Non- Financial transaction
(c) Financial & Non- financial transactions
(d) Personal transactions of the proprietors

54. Which of the following transaction is not of financial character?

(a) Purchase of asset on credit
(b) Purchase of goods for cash
(c) Withdrawing of money by proprietor from business
(d) Strike by employee

55. Internal users of accounting information are

(a) Owners
(b) Creditors
(c) Management
(d) Government

56. Which of the following is not an internal user of financial statement?

(a) Owners
(b) Managers
(c) Lenders
(d)Employees

57. Depreciation is the process of valuation of an asset to arrive at its----------

A. market value.
B. Written down value
C. Cost
D. None of the above

58. Revenues, liabilities and equity accounts are increased by

A. debits.
B. Credits
C. None of the above

59. At the end of the fiscal year, Accounts Receivable has a balance of Rs.100,000 and Allowance for
Doubtful Accounts has a balance of Rs.7,000. The expected net realizable value of the accounts
receivable is:

A. Rs.100,000
B. Rs.7,000
C. Rs.107,000
D. Rs.93,000
60. While finalizing the current year’sprofit company realized that there was an error in the valuation of
closing stock of previous year. In the previous year the closing stock was valued more by Rs. 50,000 as a
result :

A. Previous year’s profit is overstated and current year’s profit is also overstated
B. Previous year’s profit is understated and current year’s profit is overstated
C. Previous year’s profit is understated and current year’s profit is also understated
D. Previous year’s profit is overstated and current year’s profit is understated

61. If closing balance appears in the trail balance it should be

A. Credited to the trading account

B. Credited to the profit and loss account
C. Deducted from the purchase in the trading account
D. Shown on the asset side of the balance sheet

62. The main object of providing depreciation is

A. Calculate the true net profit

B. Compute the actual cash profit
C. Create funds for replacement of fixed asset
D. Reduce tax burden

63. Carriage out expenses are come under

A. Administrative expenses

B. Financial expenses

C. Manufacturing expenses

D. Distribution expenses

64.Mines, quarries etc. are

A. Fixed asset

B. Fictitious asset
C. Current asset

D. Wasting asset

65. The final accounts , when adjustment entry is passed ,it affects the minimum ________

A. One account

B. Two account

C. Three account

D. Entire account

66. The closing stock will appear in trial balance at the

A. Debit side

B. Asset side

C. Credit side

D. None of these

67. Outstanding salary is shown on

A. Balance sheet

B. Trading account

C. Suspense account

D. Outstanding account

68. According to which concept, proprietor of a business is treated as a creditors to the extent of his
capital

A. Money measurement

B.Cost
C.Dual aspect

D.Business Entity

69. The policy of anticipate no profit and provide for all possible losses arises due to

A. Convention of consistency

B. Convention of conservatism

C. Convention of materiality

D. Convention of full disclosure

70. Capital account is a

A. Fictitious account

B. Personal account

C. Liability account

D. Nominal account

71. Revenue is generally recognized as being earned at the point of time

A. Sale is effected

B. Cash is effected

C. Production is completed

D. All of the above

72. The fundamental accounting equation Assets = liabilities is the formal expression of

A. Matching concept

B. Entity concept

C. Going concern concept

D. Dual aspect concept

73. Depreciation is

A. An accounting necessity only

B. Tax necessity only

C. Tax and accounting necessity

D. Tax, account and audit necessity

74.Every debit has a corresponding credit, it is the concept of

A. Incomplete records

B. Cost sheets

C. Single entry system

D. Double entry system

75. Bank loan account is a ______

A. Real account

B. Nominal account

C. Personal account

D. Current account

76. Accounting records transactions in term of

A. Commodity units

B. Production units

C. Monetary units

D. Expense units
77. Income received in advance by a business units is

A. A liability

B. An assets

C. A loss

D. Gain

78. Expenditure incurred by a publisher for acquiring copyright is a.

A. Deferred revenue expenditure

B. Capital expenditure

C. Revenue expenditure

D. Assets

79. Loss of cash by theft committed by cashier after business hours is a

A. Revenue loss

B. Deferred revenue loss

C. Capital loss

D. Business loss

80. An expenditure incurred to derive long term advantage is

A. Revenue expenditure

B. Expense

C. Capital expenditure

D. Deferred capital expenditure

81. In accounting only ________ discount is recorded

A. Trade

B. Cash

C. Real

D. None of these

82. Debit balance of all personal accounts are collectively called

A. Sundry creditors

B. Sundry debtors

C. Personal account balance

D. Total of personal accounts

83. Machinery purchased on account is recorded in

A. Journal

B. Ledger

C. Purchase book

D. Cash book

84. The error disclosed by Trial Balance is

A. Wrong amount posted in ledger account

B. Error of principle

C. Non‐ recording of a transaction in the books of original entry

D. Errors of omission

85. Cash discount is allowed by

A. Wholesaler

B. Debtor

C. Creditor

D. Retailer

86. Rent prepaid is

A. Assets

B. Liability

C. Income

D. Expense

87. Closing stock given in the trial balance will be taken to

A. P&L account only

B. Income and expenditure account only

C. Trading account only

D. Balance sheet only

88. Sale of grass in the case of a sports club is

A. An assets

B. Revenue receipt

C. Capital receipt

D. Income

89. In income & Expenditure accounts, we record

A. Items of capital nature alone

B. Items of revenue nature alone

C. Both

D. Items of expenditure

90. Fixed assets purchased on hire purchased on hire purchase terms are recorded at

A. Net realization value

B. Cash value

C. Hire purchase price

D. Cost price

91. Collection of all accounts is called

A. Trial balance

B. Journal

C. Ledger

D. Cash book

92. Gross assets liabilities will be equal to

A. Net assets

B. Total assets

C. Capital

D. Net liabilities

93. Allowance made for prompt payment is called

A. Cash allowance
B. Cash discount

C. Trade discount

D. Discount

94. Cash purchase of fixed asset is entered in the

A. Purchase book

B. General ledger

C. Cashbook

D. Purchase account

95. Normally value of closing stock ________ in the trial balance

A. Appears

B. Does not appear

C. May or may not appear

D. Sometime appear

96. Trading account is a _______ account

A. Personal

B. Real

C. Nominal

D. Expenses
97. 1/6 profit on sales means ________ on cost

A. 1/6

B. 1/5

C. 1/4

D. 1/3

98. In sole trader balance sheet asset are arranged in the order of

A. Liquidity

B. Permanence

C. Transferability

D. All the above

99. ________ is an expenditure which does not bring any benefit to the concern

A. Revenue expenditure

B. Capital expenditure

C. Deferred revenue expenditure

D. Loss

100. Asset which reduces its value, on use, but is not replaced is called

A. Contingent assets

B. Fictitious assets

C. Intangible assets

D. Wasting assets

101. Unearned income is a

A. Liability

B. Asset

C. Expense

D. Income

102. Prepaid expenses are ______ account

A. Nominal

B. Personal

C. Personal account without name

D. Real

103. Unexpired expenses is a _______

A. Liability

B. Asset

C. Income

D. Expenditure

104. Transactions of a general nature which occur frequently are first recorded in the

A. General ledger

B. Special journal

C. Cashbook

D. Subsidiary book

105. Income and expenditure account is the ______ account of a non-trading concern

A. Balance sheet

B. P & L account
C. Ledger

D. General

106. Loss on sale of asset is taken to

A. Receipts and payments account

B. Income and expenditure account

C. Balance sheet

D. Trial balance

107. Sales of grass in the case of a sports club is

A. A capital receipts

B. A revenue receipts

C. An asset

D. A liability

108. The system of keeping incomplete record is termed as

A. Double entry system

B. Original entry system

C. Single entry system

D. journal entry system

109. The trial balance of the accounts of incomplete records shows

A. debit balance

B. credit balance

C. equal balance
D. none of these

110. Incomplete records are maintained usually by a

A. company

B. government

C. sole trader

D. partnership firm

111. Creditors account is prepared to ascertain

A. cash purchases

B. cash sales

C. credit sales

D. credit purchases

112. To find out credit sales which account should be prepared

A. debtors account

B. creditors account

C. sales account

D. purchases account

113. Cash paid to creditors + closing creditors + opening creditors =

A. total purchase

B. cash purchase

C. credit purchases

D. total debtors
114. Bills receivable as endorsed is debited to

A. creditors account

B. bills receivable account

C. debtors account

D. bills payable account

115. Bills payable honored during the year will be debited to ______

A. cash account

B. bills payable

C. bills receivable

D. creditors

116. Cash paid to creditors can be calculated from

A. debtors account

B. creditors account

C. bills receivable account

D. bills payable account

117. Bills payable dishonored during g the year will be credited to

A. bills payable

B. creditors

C. bills receivable

D. debtors
118. Excess of asset over liability is called

A. creditors

B. profit

C. capital

D. goodwill

119. Financial accounting looks for the interests of

a) Investors
b) Employees
c) Suppliers
d) Both investors and suppliers

120. Financial Statement prepared by the organisation comprises

a) Profitability Statement
b) Balance Sheet
c) Both
d) None of above

121. Which of them have some similarities?

a) Financial Accounting &Management Accounting
b) Cost Accounting and Management Accounting
c) Financial Accounting & Cost Accounting
d) None of the above

122. Financial Statement of business at any targeted time in terms of assets and liabilities
a) Book Keeping
b) Profitability Statement
c) Balance Sheet
d) Audit
123. Financial Accounting considers the transactions
a) in terms of money
b) important from business point of view
c) not in terms of money
d) All of the above

124. When an owner credits or debits any amount,hecannot put that transaction in financial account
records of organisation.This is known as
a) Money Measurement Concept
b) Cost Concept
c) Business Entity Concept
d) Conservatism

125. While putting the value or price of an entity in financial records the lowest price is recorded not the
current price or current market value.This is known as
a) Business Entity Concept
b) Conservatism
c) Cost Concept
d) Money Measurement Concept

126. In financial accounting records the entities whose monetary value is not known are not
entered.This concept is
a) Double Entry Book Keeping Method
b) Cost Concept
c) Objectivity
d) Money Measurement Concept

127. Cost of asset should always be equal to the cost of the liabilities.This concept is
a) Double Entry Bookkeeping
b) Matching Concept
c) Consistency
d) Money Measurement Concept

128.Businessman always see business running for an indefinite period.This concept is

a) Accounting Period Concept
b) Money Measurement Concept
c) Consistency
d) Going Concern Concept

129. The Financial record should always be published in a definite time period according to
a) Accounting Period Concept
b) Cost Concept
c) Money Measurement Concept
d) Consistency

130. Revenue earned during a financial period should be counter checked according to
a) Accounting Period Concept
b) Cost Concept
c) Matching Concept
d) Dual Aspect Concept

131. Price of Asset or liabilities owned by the business should be recorded according to their original
price not the present market value.This concept is
a) Conservatism
b) Cost Concept
c) Materiality
d) Money Measurement Concept

132. Revenue needs to be recorded in books of account so that there won't be any confusion.This
follows the rule
a) Accrual Concept
b) Double Entry Bookkeeping
c) Objectivity
d) Going Concern Concept

133. Incomes and expenditures need to be recorded in books of account as and when there is any
transaction not waiting till their payment.This concept is known as
a) Accrual Concept
b) Double Entry Bookkeeping
c) Objectivity
d) Money Measurement Concept

134. Accounting Policies and Procedures once decided should not be changed till any sound reason is
there.This is known as
a) Accrual Concept
b) Conservatism
c) Business Entity Concept
d) Consistency

135.Comparing the cost of the entities and then deciding expenditures for which entity should be
written in financial record is a concept of
a) Money Measurement Concept
b) Matching Concept
c) Materiality
d) Cost Concept

136. Which type of expenditure is shown in asset side of Balance sheets ?

a) Capital Expenditure
b) Reffered Revenue Expenditure
c) Revenue Expenditure
d) None of the above

137. Which type of expenditure affects the Profitability Statement ?

a) Revenue
b) Capital
c) Reffered Revenue
d) All of the above

138. Which type of expenditure is done for making assets ?

a) Revenue
b) Deferred Revenue
c) Capital
d) All of the above

139. In which type of expenditure the organization receives return during the same period they paid for?
a) Revenue
b) Capital
c) Deferred Revenue
d) All of the above

140. The reduction in the value of the fixed assets which can arise due to time factor is
a) Discount
b) Depreciation
c) Reduction
d) None of the above

141. Floating asset is known as

A. fixed asset
B. current assets
C. noncurrent assets
D. long term asset

142. As per the cost concept an asset is recorded at its

A. market cost
B. actual cost
C. normal cost
D. purchase cost

143. The business will continue to operate for an indefinitely long period in the future, unless there is a
good evidence to the contrary this assumption is related to
A. cost concept
B. dual aspect concept
C. matching concept
D. none of these

144. A person who owes money to the firm is called

A. Debtors
B. Creditors
C. Owners
D. Bankers

145. --------provides information for income determination-

A. Financial accounting
B. cost accounting
C. management accounting
D. none of these

146. -------helps in ascertaining costs beforehand-

A. Financial accounting
B. cost accounting
C. management accounting
D. none of these

147. The scope of cost accounting include----,----- and-----

A. Cost ascertainment, cost presentation, cost control
B. tax planning, tax accounting, financial accounting
C. presentation of accounting information, creation of policy, day-to day operation
D. none of the above

148. Cost accounting disclose ------

A. The Financial position
B. profit/loss of a product, job or service
C. effect and impact of cost on business
D. none of these

149. -----is a post mortem of past costs-

A. Financial accounting
B. cost accounting
C. both a & b
D. none of these

150. --------aids in price fixation-

A. Financial accounting
B. cost accounting
C. management accounting
D. none of these

151. ------is the oldest branch of accounting-

A. Financial accounting
B. cost accounting
C. management accounting
D. none of these
152. -------includes financial and cost accounting, tax planning and tax accounting-
A. Financial accounting
B. cost accounting
C. management accounting
D. none of these

153. ---------is not the scope ofCost Accountancy-

A. Ascertaining cost
B. cost accounting
C. cost control
D. tax planning

154. Cost Accounting has been developed becauseof------ of Financial Accounting-

A. Limitations
B. advantages
C. both a & b
D. none of these

155. Cost Accountancy is the science, art and -------of a cost accountant-
A. Practice
B. exercise
C. hard work
D. effort

156. Cost accounts deal partly with facts and figures and partly with---
A. Estimates
B. costs
C. income
D. revenue

157. Cost accounting provides data for managerial------

A. Decision making
B. recruitment
C. retrenchment
D. none of the above-

158. Cost accounting is based on-------figures-

A. Estimated
B. historical
C. actual
D. none of these-

159. Cost accounting provides detailed information about -------of various products, processes, services
and operations-
A. Costs
B. income
C. either a or b
D. none of these-

160. Cost accounting records both monetary and ----- units-

A. Physical
B. cost
C. both a & b
D. none of these-

161. Costing and cost accounting are -------

A. Not the same
B. one and the same
C. not related at all
D. none of these-

162. Managerial accounting information is generally prepared for

a) Shareholders
b) Creditors
c) Managers
d) Regulatory agencies

163. Management accounting is applicable to

a) Service entities
b) Manufacturing entities
c) Not-for-profit entities
d) All of these

164. . External users of accounting information are

(a) Researchers
(b)Government
(c) Banks & Financial Institutions
(d) All of the above

165. Which of the following is not the limitation of accounting?

(a) Based on accounting conventions
(b)Incomplete information
(c)Evidence in legal matters
(d) Omission of Qualitative information

166. Which of the following is/are subfields of accounting?

(a) Financial Accounting
(b)Cost Accounting
(c) Management Accounting
(d) All the above

167. Cost Accounting is related to

(a) Recording of financial transactions
(b) Ascertaining the cost of goods produced or services rendered
(c) Management information systems
(d) None of the above

168. Current assets include

(a) Bills Receivable
(b) Prepaid expenses
(c) Cash
(d) All of the above

169. 'All the following Items are classified as fundamental accounting assumptions
Except. .. .
(A) Consistency (B) Business entity
(C) Going concern (D) Accrual

170. Two primary qualitative characteristics of financial statements are.

(A) Understandability and materiality (B) Relevance and reliability
(C) Relevance and understandability (D) Materiality and reliability

171. VidyabharteePrakashanfollowsthe writtendown value method ofdepreciating

machineryyearafteryeardueto .
(A) Comparability (B) C o n v e n i e n c e
(C) Consistency ( D) Alloftheabove

172. A purchased a car for Rs.7,50,000, making a down payment of Rs.50,0OO and signing a
Rs.7,00,000 bill payable due in 45 days. Asa result of this transaction.
(A) Total assets increased by Rs.7,50,000. .
(B) Total liabilities increased by Rs.7,00,000.
(C) Total assets increased by R:;.7,00,000.
(D) Total assets increased by Rs.7;0O,000 with corresponding increase in liabilities by Rs. 7 ,00,000.

173.Gorajpurchased goodsforRs.15,00,000 and sold4/5thofthegoodsamounting

Rs.18,OO,000andmetexpensesamounting Rs.2,50,OOOduringtheyear,2010.He counted
netprofitasRs.3,50,000. Whichoftheaccounting conceptwasfollowed byhim?
(A) Economic Entity(B)MoneyMeasurement
(C) Periodicity (D) Matching

174. Ojas purchased goods for Rs.25,000 and sold 80% of such goods during accounting year ended
31st March, 2011. The market value of the remaining was Rs.4,OOO. He valued the closing stock at cost.
He violated the conceptof....
(A) Money measurement (B) Conservatism
(C) Cost (D) Periodicity

175. Increase in the amount of creditors results in.

(A) Decrease in assets as well as liabilities
(B)Increase in assets and decrease in liabilities
(C) Increase in assets as well as liabilities
(D) Decrease in assets and decrease inliabilities

176. Decrease in the amount ofdebtor’s results in.......

(A) Increase in cash. (B) Decrease in cash.
(C) Increase in assets. (D) No change in assets.

177. Decrease in the amount of creditors results in

(A) Increase in cash. (B)Decrease in cash.
(C) Increase in assets. (D) No change in assets.

178. If an individual asset is increased, there will be a corresponding .

(A) Increase of another asset or increase of capital.
(B)Decrease of another asset or increase of liability.
(C) Decrease of specific liability or decrease of capital.
(D) Increase of drawings and liability.

179.Purchase of machineryfor cash

(A) Decreases total assets. (B) Increases total assets.

(C) Retains total assets unchanged. (D) Decreases total liabilities.

180. Valuation of stock-in-trade, at cost price or market price whichever is higher, wouldviolate
principle of
(A) Conservatism (8) Disclosure (C) Consistency (D) CostConcept

181. Which of the following concepts is violated by the businessman in this case?
Cost of machinery purchased on 1st April, 2009 Rs. 10,000 ; Installation charges Rs. 1,000 Market
value as on 31st March,2010 was Rs. 12,000. While finalizing the annual accounts, thecompany valued
the machinery atRs. 12,000.
(A)Cost (B) Matching (C) Realization (D) Periodicity

182. Depreciation in spirit is similar to:

(a) Depletion
(b) Amortization
(c) Depression
(d) None of the above

183. Balance Sheet is always prepared:

(a) for the year ended.
(b) As on a specified date.
(c) None of these.

184. Unpaid and unrecorded expenses are called:

(a) Prepaid expenses
(b) Accrued expenses
(c) Additional expenses
(d) None of these

185. Amount, cash, or other assets removed from business by owner is:
(a) Capital
(b) Drawings
(c) Assets
(d) None of these

186. Users of accounting information include:

(a) The tax authorities
(b) Investors
(c) Creditors
(d) All of these

187. The business form(s) in which the owner(s) is (are) personally liable is (are) the:
(a) Partnership only
(b) Proprietorship
(c) Corporation only
(d) Partnership and proprietorship

188. The investment of personal assets by the owner:

(a) Increases total assets and increases owner’s equity
(b) Increases total assets only
(c) Has no effect on assets but increases owner’s equity
(d) Increase assets and liabilities

189. All of the following are forms of organizations except:

(a) Proprietorship
(b) Corporation
(c) Retailer
(d) Partnership

190. Economic resources of a business that are expected to be of benefit in the future are referred to as:
(a) Liabilities
(b) Owner’s equity
(c) Withdrawals
(d) Assets

191. An owner investment of land into the business would:

(a) Decrease withdrawals
(b) Increase liabilities
(c) Increase owner’s equity
(d) Decrease assets

192. A cash purchase of supplies would:

(a) Decrease owner’s equity
(b) Increase liabilities
(c) Have no effect on total assets
(d) None of these

193. An owner investment of each into the business would:

(a) Increase assets
(b) Decrease liabilities
(c) Increase withdrawals
(d) Decrease owner’s equity

194. The payment of rent each month for office space would:
(a) Decrease total assets
(b) Increase liabilities
(c) Increase owner’s equity
(d) None of these

195. Real accounts are related to:

(a) Assets
(b) Expenses and incomes
(c) Customers and Creditors etc.
(d) None of these

196. Which one of the following accounts would usually have a debit balance?
(a) Cash
(b) Creditors
(c) Accounts payable
(d) Salaries Expenses
197. Quick assets include which of the following?
(a) Cash
(b) Accounts Receivable
(c) Inventories
(d) Only (a) and (b)

198. Net income plus operating expenses is equal to:

(a) Net sales
(b) Cost of goods available for sale
(c) Cost of goods sold
(d) Gross profit

199. ---------------------------- relates to the operations of th business of an accounting period

(a) Capital Expenditure
(b) Revenue Expenditure
(C) Deferred Revenue Expenditure
(d) Prepaid Expenditure

200. ---------------------- generates enduring benefits and helps in revenue generation over more than one
accounting period.
(a) Capital Expenditure
(b) Revenue Expenditure
(C) Deferred Revenue Expenditure
(d) Prepaid Expenditure
 Correct
Qu no Correct Answer Qu no Answer

1 A 101 A
2 B 102 C
3 D 103 B
4 A 104 B
5 A 105 B
6 C 106 B
7 C 107 B
8 D 108 C
9 A 109 D
10 A 110 C
11 A 111 A
12 A 112 A
13 A 113 C
14 C 114 A
15 C 115 B
16 A 116 B
17 A 117 A
18 B 118 C
19 D 119 D
20 A 120 C
21 A 121 B
22 C 122 C
23 B 123 D
24 D 124 C
25 A 125 B
26 B 126 D
27 B 127 A
28 D 128 D
29 B 129 A
30 C 130 C
31 C 131 B
32 A 132 C
33 C 133 A
34 C 134 D
35 C 135 C
36 A 136 B
37 A 137 A
38 D 138 C
39 C 139 A
40 A 140 B
41 A 141 B
42 A 142 B
43 B 143 D
44 A 144 A
45 A 145 A
46 D 146 B
47 C 147 A
48 B 148 B
49 B 149 A
50 A 150 B
51 A 151 A
52 B 152 C
53 A 153 D
54 D 154 A
55 C 155 A
56 C 156 A
57 B 157 A
58 B 158 A
59 D 159 A
60 D 160 A
61 D 161 A
62 C 162 C
63 D 163 D
64 D 164 D
65 B 165 C
66 C 166 D
67 A 167 B
68 D 168 D
69 B 169 B
70 B 170 B
71 A 171 C
72 D 172 D
73 D 173 D
74 D 174 B
75 C 175 C
76 C 176 A
77 A 177 B
78 B 178 B
79 C 179 C
 80 C 180 D
81 B 181 B
82 B 182 C
83 A 183 B
84 A 184 B
85 C 185 B
86 A 186 D
87 D 187 D
88 B 188 A
89 B 189 C
90 B 190 D
91 C 191 C
92 C 192 C
93 B 193 A
94 C 194 A
95 B 195 A
96 C 196 A
97 B 197 D
98 A 198 D
99 D 199 B
100 D 200 A