QUESTION BANK Class 11

QUESTION BANK
CLASS 11
INTRODUCTION TO ACCOUNTING
MCQs
1. Basic function of financial accounting is to:

a. Record all business transactions
b. Interpret cost data
c. Assist the employees
d. Interpret management data
2. Financial position of business is determined by
a. Financial accounting
b. Cost accounting
c. Management accounting
d. All of these
3. Book- keeping means
a. Recording financial transactions in the books of accounts
b. Taking all steps from recording of transactions in the books of original entries to
preparation of final accounts
c. Preparing final accounts
d. Taking all steps after preparing final accounts
4. Book keeping is wider concept than accounting,
a. True
b. False
c. Partially true
d. Partially false
5. Accounting starts
a. Where book keeping ends
b. Where book keeping begins
c. Where books are not maintained at all
d. After preparing final accounts
6. Which of the following transactions is not of financial character?
a. Purchase of asset on credit
b. Purchase of asset on cash
c. Withdrawing of money by proprietor from business
d. Strike by employees
7. Last step of accounting process is
a. Provide information to various parties who are interested in business enterprise
b. Record transactions in the books
c. To make summary in the form of financial statements
d. To classify the transactions under separate heads in the ledger
8. Internal users of accounting information are
a. Potential investors
b. Creditors
c. Management
d. Employees
9. External users of accounting information are
a. Researchers
b. Government
c. Potential investors
d. All of these
10. Accounting is
a. Only an art
b. Only a science
c. Art and science both
d. Neither art nor science
11. Which of the following is not a sub field of accounting?
a. Financial accounting
b. Book keeping
c. Management accounting
d. Cost accounting
12. Which of the following is the most relevant accounting information for taxation authorities?
(A) Cash Balance of the firm
(B) Credit Sales of the year
(C) Book Value of the Fixed Assets
(D) Profit generated during the year
13. Which of the following limitations of accounting states that accounts may be manipulated
to conceal vital facts:
(A) Accounting is not fully exact
(B) Accounting may lead to window dressing
(C) Accounting ignores price level changes
(D) Accounting ignores qualitative elements
14. Which qualitative characteristics of accounting information is reflected when 10 accounting
information is clearly presented?
(A) Relevance
(B) Reliability
(C) Comparability
(D) Understandability
15. Use of common unit of measurement and common format of reporting

promotes:
(A) Comparability
(B) Relevance
(C) Reliability
(D) Understandability
16. Which of the following is included in Qualitative characteristics of accounting

information:
(A) Reliability
(B) Comparability
(C) Relevance
(D) All of these
Answers: 1. A 2. A 3. A 4. B 5. B 6. D 7. A 8. C 9. D 10. C
11. B 12. D 13. B 14. D 15. A 16. D
BASIC ACCOUNTING TERMS

1. In a business 'Purchases' refers to the:
(A) Purchase of an article to be used in office.
(B) Purchase of goods for resale.
(C) Purchase of an assets to be used in factory.
(D) all of these
2. Amount received or receivable against sale of goods is
(A) Revenue Receipt
(B) Capital Receipt
(C) Sometimes revenue receipt and sometimes capital receipts
(D) Capital Reserve
3. The term fixed assets include:
(A) Closing Stock (B) Bills Receivable
(C) Debtors (D) Furniture
4. The term current assets include:
(A) Debtors (B) Motor Vehicle
(C) Machinery (D) Building
5. Current assets do not include:
(A) Stock (B) Short term investment
(C) Prepaid expenses (D) Unearned income
6. Tangible Asset is:

(A) Goodwill (C) Patents
(B) Stock (D) Prepaid Expenses
7. Intangible Asset is:
(A) Cash (B) Stock
(C) Goodwill (D) Land
8. Wasting Asset is:
(A) Machinery (C) Computer
(B) Oil Wells (D) All of the above
9. Fixed Liabilities include:
(A) Bank Overdraft (C) Short-term loans
(B) Long-term Loans (D) Creditors
10. Current Liabilities include:

(A) Bills Payable (B) Creditors
(C) Outstanding Expenses
(D) All of the above
11. Which of the following is capital expenditure?
(A) Wages
(B) Wages paid for building construction
(C) Repair expenses of building
(D) Advertisement Expenses
12. Which of the following is Revenue Expenditure?
(A) Repair Expenses
(B) Building Construction Expenses
(C) Expenses on purchase of Machinery
(D) Purchase of Investments
13. A person who owes money to the firm is called
(A) Debtor (B) Creditor (C) Supplier (D) None of these
14. A person to whom money is owed by the firm is call...................0

(A) Debtor (B) Creditor
(C) Customer (D) None of these
15. Goods means:
(A) Commodity to be bought and sold
(B) Commodity to be bought but not to be sold
(C) Commodity to be used as an asset
16. Trade Discount is:
(A) Which is allowed at the time of receiving the payment
(B) Which is allowed at the time of sale of goods
(C) Which is allowed both at the time of receiving payment and sale of goods
(D) Allowed in all of the above
17. The person, firm or institution who does not pay the price in Cash for the goods
purchased or the services received is called:
(A) Proprietor
(B) Debtor
(C) Creditor
(D) All of these
18. Trade Discount allowed:
(A) Is shown separately in the books of accounts.
(B) Is not shown in the books of accounts.
(C) Can be shown either separately or deducted from purchase cost.
(D) All of the above.
19. Cash Discount is :
(A) Which is received at the time of making the payment
(B) Which is allowed at the time of sale of goods
(C) Which is received at the time of purchase of goods
(D) Which is received both at the time of making payment and purchase of
goods
20. Current assets do not include:
(A) Debtors (B) Motor Car
(C) Bank Balance (D) Prepaid Expenses
21. Tangible Assets do not include:

(A) Goodwill (B) Furniture
(C) Stock (D) Cash

22. Intangible Assets do not include:
(A) Patents (B) Trade Marks
(C) Stock (D) Prepaid Expenses
23. Wasting Assets do not include:

(A) Mines (B) Patents
(C) Land and buildings (D) Trade Marks
24. Current Liabilities include:
(A) Debentures (B) Bills Payable (C) Long-term Loans (D) Capital
25. Current Liabilities do not include:
(A) Sundry Creditors (B) Bills Payable
(C) Outstanding Salaries (D) Prepaid Insurance
26. Patent is:

(A) Tangible Asset (B) Intangible Asset
(C) Current Asset (D) None of the Above
27. Maruti Car is :

(A) Current Asset (B) Intangible Asset
(C) Tangible Asset (D) None of the Above
28. Any expenditure, the full benefit of which is received during one accounting
period is termed as:
(A) Current Liability
(B) Current Asset
(C) Capital Expenditure
(D) Revenue Expenditure
29. Which of the following will be treated as drawings:
(A) Withdrawing money for payment of salary to employees
(B) Withdrawing money for payment to creditors
(C) Withdrawing money from business for private expenses
(D) Withdrawing money for purchase of asset
30. Main feature of business transaction is:
(A) It involves an economic activity
(B) It results in a change in the financial position of the firm
C) Change must be capable of being expressed in terms of money
31. Current Liabilities do not include:
(A) Bills Payable
(C) Outstanding Exp.
(B) Creditors
(D) Debentures
32. The term sales is used only for the sales of .......... and is never used for the sale
of
(A) Assets, Investments
(B) Assets, Goods
(C) Intangible Assets, Goods
(D) Goods, Assets
33. Out of the following assets which one is NOT an intangible asset?
box
(A) Patents (C) Goodwill
(B) Investments (D) Trademark
34. At the end of financial year, during which sale of goods was worth ₹5,00,000,
the closing stock is valued at 40,000. This is ...........
(A) An event
(B) A transaction
(C) Both an event as well as transaction
(D) None of (A) and (B)
35. Which of the following is the Capital expenditure?
(A) Wages paid for repair of building
(B) Wages paid for white washing of building
(C) Wages paid for construction of building
(D) Wages paid for cleaning of building
36. Consider the following items:
1. Prepaid Salary 2. Accrued Interest (Receivable)
3. Loan (Short term) 4. Bank Overdraft
Current Liability would include:

(A) 1, 2, 3, 4
(C) 4, 3, 1
(B) 2, 3, 4
(D) 3,4
37. Goods used from stock of the business for business purposes are treated as the …………….
business but similar goods used by the proprietor for his personal use are treated as…………
(A) Inventory, expenditure (B) Drawings, expenditure
(C)Drawings, inventory (D) expenditure, drawings
38. Livestock includes
A. Stock B. Goods C. Animals D. Life insurance policy
Answer: 1. (B) 2. (A) 3.(D) 4. (A) 5. (D) 6. (B) 7. (C) 8. (B) 9. (B) 10. (D)
11. (B) 12. (A) 13. (A) 14. (B) 15. (A) 16. (B) 17.(B) 18.(B) 19. (A) 20. (B)
21. (A) 22. (C) 23. (C) 24. (B) 25. (D) 26. (B) 27. (C) 28.(D) 29.(C) 30. (D)
31. (D) 32. (D) 33.(B) 34. (C) 35. (C) 36. (D) 37. (D) 38. (C)
ACCOUNTING PRINCIPLES
1. Accounting Principles are:
(A) Made by government
(C) Made by Law
(B) Made by man
(D) None of the above
2. Accounting principles mean :
(A) The rules which are adopted while recording the accounting transactions
(B) The rules which are adopted while preparing Profit & Loss Account
(C) The rules which are adopted while preparing balance sheet
(D) The rules which are adopted while preparing Director's Report
3. Various names of accounting principles are :
(A) Assumptions (B) Conventions
(C) Concepts (D) All of the above
4. According to Business Entity Concept:
(A) Business is treated as a separate unit from its owner
(B) Business is not treated as a separate unit from its owner
(C) Personal transactions of owner are not distinguished from business
transactions
5. According to Money Measurement Concept only those transactions are

recorded in accounting :
(A) Which are capable of being expressed in terms of
terms of money
(B) Which cannot be expressed in terms of money
(C) both of the above transactions
6. As per Going Concern Concept business will continue to exist :
(A) For a limited period
(B) For 10 years
(C) For 25 years
(D) For a long period in the future
7. As per Income Tax Act, accounting period is :
(A) From 1st January to 31st December
(B) From 1st April to 31st March
(C) From 1st July to 30th June
(D) From Diwali to Diwali
8. As per Cost Concept, an asset is recorded in the books
(A) At market value

(B) At going concern value
(C) At the price at which it was acquired

(D) At liquidation value
9. As per Dual Aspect Concept:

(A) Assets = Liabilities - Capital
(B) Assets = Capital - Liabilities
(C) Assets = Liabilities + Capital
(D) Capital = Assets + Liabilities
10. Accounting Period concept means:
(A) A period of 12 months
(C) Indefinite period
(B) A period of 6 months
(D) Period fixed by management
11. According to Dual Aspect Concept, the system of recording transactions is called:
(A) Double Account System
(B) Double Entry System
(C) Double Book System
12. As per Revenue Recognition Concept, revenue is deemed to be realised
(A) When purchase order is received from the purchaser
(B) When goods are delivered to the purchaser
(C) When the title of the goods has been transferred to the purchaser
(D) When cash is received from the purchaser
13. Cost concept means:
(A) Sale of goods at cost price
(B) Sale of goods at market price
(C) Sale of goods at cost plus percentage of cost
(D) Recording of asset in the books at cost price
14. According to Objectivity Concept :
(A) There should be proper vouchers for checking every transaction

(B) There should be proper vouchers for checking every cash transaction
(C) There should be proper vouchers for checking every purchase-sale transaction
(D) There is no need of vouchers for checking of transactions
15. According to Convention of Full Disclosure
(A) All secrets of the business must be disclosed
(B) All significant information should be completely disclosed
(C) All accounts should be maintained honestly
(D) All accounts should be prepared quickly
16. Convention of Consistency means:
(A) All the firms in the same industry should use identical accounting principles and procedures
(B) All principles and procedures of accounting are utilised
(C) Accounting principles and methods should remain consistent from one year to another
17. Convention of conservatism takes into account:
(A) All future profits and losses
(B) All future profits and not losses
(C) All future losses and not profits
(D) Neither profits nor losses of the future
18. According to Convention of Conservatism closing stock is valued at:
(A) At cost Price
(B) At Realisable value
(C) Cost price or realisable value whichever is less
(D) At Real value
19. According to Convention of Conservatism:
(A) Provision is made for bad and doubtful debts Sonals

(B) Depreciation is charged on assets
(C) Recording is made of outstanding expenses
20. The concept that a business enterprise will not be sold or liquidated in the near future is known
as:
(A) Business Entity Concept
(B) Money Measurement Concept
(C) Matching Concept
(D) Going Concern Concept
21. According to which Concept even the proprietor of the business is treated as a creditor of the
business:
(A) Going concern Concept
(B) Cost Concept
(C) Business Entity Concept
(D) Accounting Period Concept
22. Due to which concept qualitative
(A) Business Entity Concept
(B) Money Measurement Concept
(D) Dual Aspect Concept
(C) Historical cost concept
23. Accrual concept is based on:
(A) Matching Concept
(B) Dual Aspect concept
(C) Cost concept
(D) Going concern concept
24. Cost price or realisable value, whichever is less, is used for the valuation of:
(A) Current Assets
(C) Fixed Assets

(B) Closing stock
(D) All Assets
25. According to which of the following, a business is considered to run for indefinite period :
(A) Business Entity Concept (C) Historical cost concept
(B) Money Measurement Concept (D) Going concern concept
26. Due to which of the following window dressing is prohibited:
(A) Convention of Consistency
(B) Accounting Period Concept (C) Convention of full Disclosure
(D) Money Measurement Concept
27. According to which concept the same accounting methods should be used each
year:
(A) Prudence
(C) Materiality
(B) Full Disclosure
(D) Consistency
28. Everything a firm owns, it also owes out to somebody. This is explained by which concept:
(A) Dual Aspect
(B) Going Concern
(C) Money Measurement
(D) Accounting Period
ANSWER KEY: 1. B 2. A 3. D 4. A 5. A 6. D 7. B 8. C 9. C 10. A
11. B 12. C 13. D 14. A 15. B 16. C 17. C 18. C 19. A 20. D
21. C 22. B 23. A 24. B 25. D 26. C 27. D 28. A
DEPRECIATION
1. Characteristic of Depreciation is:
(A) Decline in the value of assets (B) Depreciation is of permanent nature (C)
Depreciation is a non-cash expense (D) All of the above
2. Depreciation arises because of:
(A) Obsolescence
(B) Constant use of assets
(C) Expiry of time
3. Depreciation for business is:
(A) Loss
(C) Gain
(B) Income
(D) Liability
4. Factors taken into consideration for providing depreciation are:
(A) Total cost of the asset
(B) Estimated useful life of the asset
(C) Estimated Scrap value of the asset
5. Depreciation in the value of asset is:
(A) Permanent decrease
(B) Temporary decrease
(C) Seasonal decrease
(D) None of these
6. Depreciation is provided on:
(A) Current Assets
(C) Fixed Assets

(B) Fictitious Assets
(D) Intangible Assets
7. Depreciation under fixed instalment method is calculated:
(A) On the purchase price of the asset
(B) On the closing balance of the asset
(C) On each year's opening balance of the asset
(D) On the market price of the asset
8. Depreciation under diminishing balance method is calculated:
(A) On the purchase price of the asset
(B) On the closing balance of the asset
(C) On each year's opening balance of the asset
(D) On the market price of the asset
9. Depreciation arises due to:
(A) Fluctuations
(B) Fall in the value of money
(C) Temporary fall in the market value of asset
(D) Physical wear and tear
10. Main object of charging depreciation is:
(A) Ascertaining true profit or loss
(B) Ascertaining true financial position
(C) Ascertaining true cost of production
11. Depreciation is the process of:

(A) Valuation of asset
(B) Allocation of the cost of asset
(C) Valuation and allocation of the cost of asset
12. Merit of reducing instalment method is :
(A) Easy calculation
(B) Equal burden on profit and loss account each year
(C) Approved by Income Tax Authorities
13. A machine is purchased for 80,000 and its installation charges are 10,000. If
its scrap value is ₹6,000 and effective life is 10 years, its yearly depreciation as
Per fixed instalment method will be:
(A)₹ 8,600
(B) ₹ 9,600
(C)₹ 8,400
(D) ₹ 9,000
14. Purchase price of a machine is 2,00,000 and its installation charges are ₹
30,000. Its scrap value is ₹5,000. If it is depreciated @ 10% p.a. on diminishing
balance method, the depreciation in the first year will be:
(A) 23,000
(C) 23,500
(B) 22,500
(D)16,500
15. On purchase of an asset, account debited is :

(A) Purchases A/c
(C) Depreciation A/c
(B) Assets A/c
(D) Goods A/c
16. On purchase of an asset, amount spent on its carriage is debited to:
(A) Purchases A/c
(C) Asset A/c
(B) Carriage A/c
(D) Installation Expenses A/c
17. On sale of an asset, account credited is :
(A) Asset A/c
(B) Sale A/c
(C) Goods A/c
(D) Profit & Loss A/c
18. Depreciation charged at the end of the year will be debited to:
(A) Asset A/c
(C) Goods A/c
(B) Purchases A/c
(D) Depreciation A/c
19. Depreciation charged at the end of the year will be credited to:
(A) Asset A/c
(C) Profit and Loss A/c
(B) Depreciation A/c

(D) Goods A/c
20. Loss on sale of asset is debited to:
(A) Depreciation A/c
(B) Asset A/c
(C) Profit and Loss A/c
(D) Sales A/c
21. On 1st October 2018, a machine is purchased for ₹3,60,000 and ₹ 40,000
are spent on its installation. Depreciation is charged @ 10% p.a. on original
cost method. Books are closed on 31st March each year. On 31st March, 2020
depreciation charged will be:
(A) ₹ 20,000
(C) ₹ 38,000
(B) ₹ 40,000
(D) ₹ 36,000
22. On 1st July 2017, a machine is purchased for ₹ 1,75,000 and ₹ 25,000 are
spent on its installation. Depreciation is charged @ 10% p.a. on diminishing
balance method. Books are closed on 31st March each year. On 31st March,
2020 depreciation charged will be:
(A) ₹ 18,500 (C) ₹ 16,200
(B) ₹18,000 (D) ₹16,650
23. On 1st July 2018 a machine is purchased for ₹ 6,00,000. Depreciation is

charged @10% p.a. on original cost method on 31st March each year.
Depreciation on 31st March 2020 will be: charged
(A) ₹ 60,000
(C) ₹ 55,500
(B)₹ 45,000
(D) ₹ 54,000
24. On 1st October 2018, a machine is purchased for ₹ 10,00,000. Depreciation

is charged @ 15% p.a. on diminishing balance method on 31st March each
year. The amount of depreciation on 31st March 2020 will be:
(A) ₹ 1,27,500 (C) ₹ 69,375
(B) ₹ 1,44,375 (D) ₹ 1,38,750
25. On 1st April 2018 a machinery is purchased for ₹2,00,000. Depreciation is

charged @ 10% p.a. on original cost method and books are closed on 31st
December every year. On 1st July 2020 the machinery is sold for ₹1,20,000.
Loss on sale will be:
(A) ₹ 30,000
(C) ₹ 40,000
(B) ₹ 35,000
(D) ₹ 25,000
26. On 1st April 2018 a machinery is purchased for ₹4,00,000. Depreciation is

charged @ 10% p.a. on diminishing balance method and books are closed on
31st December every year. On 1st July 2020, the machinery is sold for ₹
1,80,000. Loss on sale will be:
(A) ₹ 1,53,000
(C)₹ 1,36,350
(B) ₹ 1,19,700
(D) ₹ 1,27,800
27. A firm purchased on 1st April 2018 a second-hand machinery for ₹ 50,000
and spent ₹ 10,000 on its installation. On 1st July in the same year additional
machinery was purchased for ₹ 20,000. Depreciation is provided each year on
31st December @ 5% p.a. on written down value of the asset. The amount of
depreciation in the first year will be:
(A) ₹ 4,000
(C) ₹ 3,500
(B) ₹ 3,250
(D) ₹ 2,750
28. On 1st July 2018, a firm purchased a machinery for ₹4,00,000. On 1st
October in the same year additional machinery was purchased for ₹1,00,000
Depreciation is provided each year on 31st December @ 10% p.a. on writter
down value of the asset. The amount of depreciation in the second year will be
(A)₹ 45,000
(C) ₹ 47,000
(B) ₹ 47,750
(D) ₹ 45,750
29. When 'Provision for Depreciation A/c' is created, the amount of

depreciation is:
(A) Debited to Provision for Depreciation A/c
(B) Credited to Provision for Depreciation A/c
(C) Debited to Asset A/c
(D) Credited to Asset A/c
30. What is the amount of difference between the closing balances of two
machines after two years is both machines were purchased on the same date
with the same amount i.e., for ₹ 1,00,000? Machine I is depreciated by 20%
p.a. on Straight Line Method and Machine II is depreciated by 20% p.a. on
Diminishing Balance Method :
(A) Value of Machine II is more by ₹2,000
(B) Value of Machine I is more by ₹4,000
(C) Value of Machine II is more by ₹4,000
(D) Value of Machine II is less by ₹2,000
31. Ambuja Cement Ltd. purchased a machine on 1-1-2019 for ₹ 1,20,000.

Installation expenses were ₹ 10,000. Its residual value after 10 year is ₹5,000.
On 1-03-2019 expenses on its repairs were incurred to the extent of ₹2,000.
Depreciation is provided under straight line method. Books are closed on 31st
March every year. The amount of depreciation for the current year will be:
(A) ₹ 3,125
(B)₹ 3175
(C) ₹ 12,500
(D)₹ 12,700
32. The balance of machine on 31st March 2019 is ₹ 97,200. The machine was
purchased on 1st April 2017. Depreciation is charged @10% p.a. by diminishing

balance method. The cost price of the machine as on 1st April 2017 would be:
(A) ₹1,00,000
(B) ₹ 1,20,000
(C) ₹ 1,08,000
(D) ₹ 1,32,000
33. Original cost of an asset is ₹1,26,000; Salvage value is ₹6,000; Useful Life is
6 Years. The rate of depreciation under Straight Line Method will be:
(A) 15.87% (B) 16.67%
(C) 15.80% (D) 16.56%

34. What will be the percentage of depreciation under SLM in the following
case:
Original Cost of Machine ₹ 1,50,000
Salvage value after 9 years ₹ 15,000
Repair charges in 2nd year ₹ 10,000
(A) 11.11%
(B) 10%
(C) 10.34%
(D) 9.37%
35. Which one of the following is not a feature of written down value method
of depreciation?
(A) The book value of the asset becomes zero at any one point of
(B) The depreciation is calculated on the book value of assets and not on the
Cost
( C) the amount of depreciation charged on a specific asset reduces every year
(D) there is no need to estimate the residual value and estimated life at the
time of deciding the amount of depreciation
ANSWER KEY: 1. D 2. D 3. A 4. D 5. A 6. C 7. A 8. C 9. D
10. D 11. B 12. D 13. C 14. A 15. B 16. C 17. A 18.D
19. A 20. C 21. B 22. D 23. A 24. D 25. B 26. C 27.D 28. B
29. B 30. C 31. A 32. B 33. A 34. B 35. A
NUMERICAL QUESTIONS DEPRECIATION
1. A Company purchased on 1st April, 2016 a machinery for ₹ 80000. On 1st

October, 2017 it purchased another machine for ₹ 50000 and on 1 st
October, 2018 it sold off the first machine purchased in 2016 for ₹
23000. Depreciation was provided on the machinery at the rate of 20%
p.a. on the original cost annually. Give machinery a/c for 4 years
commencing from 1st April, 2016. Accounts are closed on 31st march
every year.
(loss on sale of machinery ₹ 17000; balance of machinery on 1-4-2020, ₹
25000)
2. Bhushan and company purchased a machinery on 1st April, 2015 for ₹
54000 and spent ₹ 6000 on its installation. On 31st December, 2016 it
purchased another machine for ₹ 30,000.
On 30th june 2017, the first machine purchased on 1st April, 2015 is sold
for ₹ 36000 and on the same date it purchased a new machinery for ₹
80000.
On December 1, 2018, the second machine (purchased on dec 1 2016)
was also sold off for ₹ 26000.
Depreciation was provided on machinery @ 10% p.a. on original cost
method annually on 31st march. Give the machinery a/c for four years.
(loss on sale of 1st machine ₹ 10,500; gain on sale of 2nd machine ₹ 2000;
balance of machine a/c on 31st march, 2019 ₹ 66000)
3. Ashoka ltd bought a machine on 1st April, 2010 for ₹ 240000 and spent ₹
4000 on its carriage and ₹ 6000 towards installation cost. On 1 st July,
2011 it purchased a second hand machinery for ₹75000 and spent ₹
25000 on its overhauling. On 1st January, 2013 it decided to sell the
machinery bought on 1st April, 2010 at a loss of ₹ 20,000. It bought
another machine on the same date for ₹ 40000. Company decided to
charge depreciation @15% p.a. on WDV method. Prepare machinery
account for 3 years. Books are closed each year on 31st March.
(sale price of machine ₹ 140305; balance of machine a/c on 31st March,
2013 ₹ 113938)
4. A Company, which closes its books on 31st March every year,
purchased 1st July, 2017, machinery costing ₹30,000. It purchased
further machinery on 1st January, 2018, costing ₹ 20,000 and on 1st
October, 2018, costing ₹ 10,000. On 1st April, 2019, one-third of the
machinery installed on 1st July, 2017, became obsolete and was sold for
₹3,000.
Show how the machinery account would appear in the books of the
Company, it being given that machinery was depreciated by Diminishing
Balance Method at 10% per annum. What would be the balance of
Machinery Account on 1st April, 2020?
[Ans. Loss on sale of Machinery ₹ 5,325; Balance on 1st April, 2020, ₹

39,330. Dep. for 2017-18 ₹ 2,750; for 2018-19 ₹ 5,225 and for 2019-20 ₹
4,370.]
PROVISION AND RESERVES
1. Provision is made:
(A) To provide for known losses
(B) To provide for unknown losses
(C) To face the financial difficulties
(D) To strengthen the financial position
2. Creation of provision is:
(A) Voluntary (B) Illegal
(C) Necessary (D) Unnecessary
3. Provisions are made:
(A) For depreciation on assets (C) For Taxes
(B) For bad and doubtful debts (D) All of the above
4. Provision……………of the year in which it is created:
(A) Increases the profit (B) Decreases the profit
(C) Does not affect the profit (D) May increase or decrease the profit
5. Provisions are necessary for :
(A) To ascertain true profit or loss
(B) To ascertain true financial position
(C) To provide for known losses in the future
6. Reserve is created:
(A) To strengthen the financial position of the business
B) To equalise the rate of dividend
(C) To meet the unforeseen liabilities and losses
7. Reserve is shown:
(A) In Trading Account
(B) In Profit and Loss Account
(C) In Assets side of Balance Sheet
(D) In Liabilities side of Balance Sheet
8. Creation of Reserve is :
(A) Illegal (B) Necessary
(C) Not necessary (D) Useless
9. Reserve is created from:
(A) Profits
(C) Assets
(B) Losses
(D) Liabilities
10. Features of reserves are:
(A) It is created out of divisible profits
(B) They are available for distribution as dividends
(C) Their creation is voluntary
11. The arrangement is made for meeting future uncertainties:
(A) Provisions
(B) Reserves
(C) Provisions and Reserves
(D) Investments
12. Reserve is created:
(A) To meet the known losses
(B) To meet the unforeseen losses
(C) To ascertain true profit or loss
(D) To ascertain true financial position
13. Creation of reserves:
(A) Increases the profits
(B) Decreases the profits
(C) Decreases the divisible profits
(D) Increases the divisible profits
14. ……………...is specific reserve :
(A) Investment Fluctuation Fund

(B) Workmen Compensation Fund
(C) Debenture Redemption Reserve
15. Profit on sale of assets is used to create :
(A) General Reserve (B) Specific Reserve
(C) Capital Reserve (D) All of the above
16. Revenue Reserve is created:
(A) Out of profits on sale of fixed assets
(B) Out of general profits
(C) Out of capital profits
(D) Out of profits on the purchase of a running business
17. Capital Reserve is created:
(A) Out of profits on sale of fixed assets
(B) Out of profits on revaluation of fixed assets
(C) Out of premium received on issue of shares
18. Secret Reserve is created by:
(A) Writing off excessive depreciation
(B) Charging capital expenditure to Profit & Loss Account
(C) Suppressing the sales
19. Secret Reserve is shown in :
(A) Profit and Loss Account

(B) Balance Sheet on the assets side
(C) Balance Sheet on the liabilities side
20. Reserve created by undervaluation of closing stock is called:
(A) Secret Reserve
(C) Specific Reserve
(B) General Reserve
(D) Capital Reserve
21. If the amount of any known liability cannot be determined accurately.
(A) Provision should be created
(B) Definite liability should be created
(C) Reserve should be created
(D) Should be shown as a contingent liability
22. Which of the following is a correct difference between a provision and

reserve?
(A) A provision is created out of a legal necessity whereas a reserve is created
as a matter of prudence.
(B) A provision is invested whereas reserve is not invested
(C) A provision is an appropriation of profit whereas a reserve is a charge

against profit
(D) A provision can be used for distribution of dividend whereas a reserve

cannot be allowed to be used for distribution of dividend.
23. Which of the following is a correct distinction between a Revenue reserve

and a Capital reserve?
(A) A revenue reserve is created out of capital profits whereas a capital reserve
is created out of business profits.
(B) A revenue reserve can be used for distribution of dividend with certain
preconditions whereas a capital reserve can be used for distribution of
dividend without any preconditions
(C) A revenue reserve is created for strengthening the financial position

whereas capital reserve is created for meeting capital losses or to be used for
purposes specified by the Companies Act.
(D) There is no distinction between revenue reserve and capital reserve
24. Which of the following statements are correct about a "Provision"?
(i) Provisions are a charge against the profits of an enterprise
(ii) Provisions are created out of divisible profits
(iii) Creation of provisions are not necessary for a business (iv) Provisions are
created to meet a known liability
(A) (i), (ii) and (iii)
(B) (ii) and (iv) only
(C) (i), (iii) and (iv)
(D) (i) and (iv) only
25. Which of the following statements is not appropriate in relation to
"Provision"?
(A) Provision is a charge against profit
(B) Provision is created for known liability
(C) Provision is created for strengthening the financial position of the business
(D) Creation of provision satisfies the principle of conservatism

ANSWER KEY: 1. A 2. C 3. D 4. B 5. D 6. D 7. D 8. C 9. A 10.
D 11. B 12. B 13. C 14. D 15. C 16. B 17. D 18. D 19. D
20. A 21. A 22. A 23. C 24. D 25. C
TRIAL BALANCE AND RECTIFICATION OF ERRORS
1. Trial balance is :
A. An account
B. A statement
C. A subsidiary book
D. A principal book
2. Trial balance is a:
A. A personal a/c
B. A real a/c
C. A nominal a/c
D. Not an a/c
3. A trial balance is prepared on the basis of:
A. Subsidiary books
B. Ledger
C. Subsidiary books and ledger
D. Cash book
4. Objective of preparing trial balance is:
A. To ascertain the profit or loss of business
B. To ascertain the financial position of business
C. To ascertain the accuracy of accounts
D. To ascertain the arithmetical accuracy of accounts
5. Trial balance is:
A. Real account
B. Nominal account
C. List of balances
D. None of the above
6. Preparation of trial balance is
A. Voluntary
B. Compulsory
C. Neither voluntary nor compulsory
D. Both A and B
7. Name of method of preparing trial balance is
A. Balance method
B. Total amount method
C. Total- cum balance method
D. All of the above
8. Most commonly used method of preparing trial balance is:
A. Balance method
B. Total amount method
C. Total- cum balance method
9. Trial balance does not include
A. Capital
B. Closing stock
C. Drawings
D. Opening stock
10. A trial balance is prepared:
A. After preparation of financial statements
B. After recording transactions in subsidiary books
C. After posting to ledger is complete
D. After posting to ledger is complete and accounts have been balanced
11.When the trial balance does not agree, the difference is transferred to:
A. Capital a/c
B. Drawings a/c
C. Suspense a/c
D. Profit and loss a/c
12. Assets are shown in the trial balance on the
A. Debit side
B. Credit side
C. Neither debit nor credit
D. Outside the trial balance
13. Trial balance contains balances of
A. Only personal and real accounts
B. Only personal and nominal accounts
C. Only real and nominal accounts
D. All accounts
14. Trial balance is prepared
A. Before journal
B. After journal
C. Before ledger
D. After ledger
15. Which of the following balance of account is shown on the credit side
of trial balance:
A. Sales a/c
B. Purchases return a/c
C. Capital a/c
D. All of the above
16. Out of the following balance of which account is shown on the debit
side of trial balance:
A. Sales account
B. Purchases return a/c
C. Sales return a/c
D. Capital a/c
17. Liabilities are shown in the trial balance on the
A. Debit side
B. Credit side
C. Neither debit nor credit
D. Outside the trial balance
18. Which of the following items is shown on the debit side of trial
balance
A. Commission received a/c
B. Bank overdraft a/c
C. Bills payable a/c
D. Bills receivable a/c
19.Out of the following, balance of which account is shown on the credit
side of Trial Balance:
(A) Purchases A/c (B) Discount Received A/c
(C) Sales Return A/c (D) Bills Receivable A/c
20.When a transaction is completely omitted to be recorded in the books,

it is called:
(A) Error of Principle (B) Error of Omission
(C) Compensating Error (D) Error of Posting
21. Errors which nullify the effects of each other, are called:
(A) Error of Principle (B) Error of Omission
(C) Error of Posting (D) Compensating Error
22. When the rules of double entry are not strictly followed, the errors
caused are called:
(A) Errors of Principle
(C) Errors of Commission
(B) Compensating Errors
(D) Errors of Omission
23. If wages paid for installation of new machinery is debited to Wages
Account, it will be called:
(A) An error of Omission
(C) An error of Principle
(B) An error of Commission
(D) A Compensating error
24. If ₹ 2,000 received from Anil has been credited to Sunil, it will be
called:
(A) An error of omission
(C) A compensating error
(D) An error of principle
25. If X has been debited by ₹ 50 instead of ₹ 500 and Y has been
debited by ₹500 instead of ₹ 50, it will be called:
(A) Error of Principle
(C) Error of Omission
(B) Compensating Error
(D) Error of Commission
26.If goods for ₹ 10,000 have been taken by the proprietor for
personal use and it has not been recorded in the books, it will be
called:
(A) An error of Principle (C) An error of Omission
(D) A Compensating error
27. If goods sold for ₹ 2,500 to Gaurav is recorded as ₹ 5,200 in sales
book, it will be called:
(A) An error of Commission (C) An error of principle
(B) An error of Omission
(D) A compensating error
28.Which of the following errors is disclosed by the trial balance:
(A) Error of Principle
(B) Error of Omission
(C) Error of balancing and carry forward
(D) Compensating error
29. Which of the following errors is not disclosed by the Trial
balance:
(A) Error of Omission
(C) Compensating Error
(B) Error of Principle
30. Which of the following errors will affect the agreement of trial
balance:
(A) Omission of recording in original records
(B) Error of posting in wrong account
(C) Error of principle
(D) Posting to the wrong side
31. Which of the following errors is not disclosed by a trial balance:
(A) Error of casting of the book of an original entry
(B) Posting of wrong amount in a ledger account
(C) Error of omitting to record a transaction in books of original
entry
32. Which of the following errors shall not prevent the agreement
of a trial balance
(A) Goods sold to X for ₹ 1,000 was recorded as ₹10,000 in sales
book
(B) The total of sales book was overcast by ₹ 1,000
(C) ₹ 8,000 were posted in Y's A/c instead of ₹800
(D) Cash balance was not included in the trial balance
33. Which of the following is not an error of principle:
(A) Purchase of furniture debited to purchases account
(B) Repair expenses on overhauling of second hand machinery
purchased debited to repairs account
(C)₹ 2,000 received from Khushi were credited to Sukhi's account
(D) Sale of old car credited to sales account
34. Which of the following errors is revealed by the Trial Balance:
(A) Wrong amount entered into the book of original entry
(B) Wrong amount posted in the ledger Account
(C) Complete omission of an entry from the books of original entry
(D) When accounting principle is violated while recording a
transaction in the books of Account
35. Which item shows a debit balance in the Trial Balance?
(A) Purchase Return
(C) Sales
(B) Salary outstanding
(D) Prepaid Expense
36. Which of the following is not an error of commission:
(A) A sale of ₹560 not recorded in Books at all.
(B) Rent paid to landlord was posted to Landlord's Account
(C) A purchase of ₹ 840 was wrongly posted to sales Account.
(D) Instead of crediting Shyam credited the other creditor Sham.
37. Which of the following errors will not affect the trial balance :
(A) Wrong balancing of an account
(B) Wrong totalling of an account

(C) Omission of an account from the trial balance
(D) Writing an amount in the wrong account but on the correct side
38. ₹10,000 received from Apoorva is credited in the account of

Prachi. It is an error of
(A) Principle
(C) Commission
(B) Omission
(D) Compensatory
39. Which of the following is the error of principle?
(A) The purchase book was overcasted by ₹500
(B) Credit sale to Arun ₹700 recorded as purchase from Arun
(C) Goods returned to Charu ₹ 4,000, posted in Chinoo's A/c
(D) Wages paid for installation of machinery debited to Wages
A/c
40. A machine is purchased for ₹ 10,000 which was wrongly
recorded in purchase account. Due to this error
(A) Trial balance will show difference of ₹ 10,000
(B) Trial balance will not show any difference
(C) Trial balance will show the difference of ₹ 20,000
(D) Trial balance will show a difference of ₹ 5,000
ANSWER KEY: 1. (B) 2. B 3. B 4. D 5. C 6. A 7. D 8. A
9. B 10. D 11. C 12. A 13. D 14. D 15. D 16. C 17. B
18. D 19. B 20. B 21. D 22. A 23. C 24. B 25. B 26.
C 27. A 28. C 29. D 30. D 31. C 32. A 33. C 34. B
35. D 36. A 37. D 38. C 39. D 40. B
NUMERICAL QUESTION TRIAL BALANCE & RECTIFICATION OF

ERRORS
1. The following trial balance has been prepared by an
inexperienced accountant. Redraft it in a correct form :-
Name of Accounts Balance Dr. Balance Cr.
Land and Building………………120000

Plant and Machinery………… 92000
Wages………………………………..18200
Discount Allowed……………………………………………….1620
Discount Received……………..730
Purchases…………………………...126000
Sales…………………………………………………………………..240000
Return Inwards…………………………………………………..6500
Return Outwards………………….3370
Opening Stock……………………15000
Debtors………………………………30000
Creditors…………………………………………………………20000
Carriage on Sales…………………………………………….3280
Carriage on Purchase…………..2800
Insurance…………………………….1500
General Expenses………………...6100
Cash in Hand………………………...2400
Bank Overdraft……………………..12100
Capital……………………………………………………………..154000
Drawings………………………………………………………….4800
Total 430200 430200
[Ans. Total of Trial Balance 4,30,200.]

2. The Trial Balance of S. Sen did not agree and the difference
in books was carried to a Suspense Account. Pass the
entries required to rectify the following errors which
accounted for the difference. Also, prepare the Suspense
Account:
(i) A Sales Invoice for ₹ 1,000 for goods sold on credit to
B. Basu was entered in the Purchases Book but in the
Ledger, the amount was correctly debited to the
account of B. Basu.
(ii) Goods bought on credit from Ram Lal for ₹ 1,500

were wrongly debited to his account as ₹ 5,100.
(iii) An amount of ₹ 275 was posted as ₹ 325 to the debit

side of the Commission Account.
(iv) The Sales Book for the month of April was
undercasted by ₹ 100.
(v) ₹ 460 paid for building repairs was debited to the
Building Account as ₹ 640.
[Suspense Account opened with a Credit of ₹ 8,930.]
3. The bookkeeper of a firm found that his Trial Balance was
out (excess credit) by ₹ 742. He placed the amount in a
Suspense Account and subsequently found the following
errors:
(i) A discount of ₹ 178 was allowed to Ramesh but in his
account only ₹ 100 is recorded.
(ii) The total of the Purchases Book was ₹ 1,000 short.
(iii) A sale of ₹ 375 to Kohli was entered in the Sales
Book as ₹ 735.
(iv) From the Purchases Book, Bose's Account was
debited with ₹ 175.
(v) Cash ₹ 250 received from Maitra against debt
previously written off was credited to his account.
(vi) Purchase of office furniture worth ₹ 750 on credit
from Delhi Furnitures was entered in the Purchases Book.
(vii) While carrying forward the total of the Sales Book
from one page to another the amount of ₹ 11,358 was
written as ₹ 11,538.
(viii) The proprietor took goods of the value of ₹ 150 for
his domestic consumption. No record of it has been made
in the books.
(ix) Repairs bill of ₹ 410 for the proprietor's personal
car, has been paid by the firm and debited to the Repairs
Account.
(x) A sale to Kassim of ₹ 700 has been entered in the

Purchases Book.
Rectify the errors by means of suitable Journal entries and

show the Suspense Account.
4. Pass the rectification entries for the following transactions:
(i) Repairs to plant amounting to ₹ 2,000 had been
charged to Plant and Machinery Account.
(ii) Wages paid to the firm's workmen for making
certain additions to machinery amounting to ₹ 1,340
were debited to Wages Account.
(iii) A cheque for ₹ 7,500 received from Sandesh was
credited to the account of Ramesh.
(iv) Goods to the value of ₹ 7,000 returned by Prateek
were included in closing stock, but no entry was
made in the books.
(v) Goods costing ₹ 5,000 were purchased for various

members of the staff and the cost was included in
'Purchases'. A similar amount was deducted from the
salaries of the staff members concerned and the net
payments to them debited to Salaries Account.
(vi) Credit purchase of old machinery from Sohan for ₹

1,70,000 was entered in the Purchase Book as
purchase from Mohan for ₹ 7,10,000. ₹ 30,000 paid
as repairing charges on the reconditioning of a newly
purchased second had machinery were debited to
General Expenses Account.
(vii) Debit and Credit totals of discount columns in the
Cash Book which come to ₹ 400 and ₹ 370
respectively have not been posted to Discount
Accounts.
5. There was an error in the Trial Balance of Ram Gopal on
31st March, 2018 and the difference in books was carried
to the Suspense Account. On going through the books, you
find that:
(i) ₹ 540 received from Mayank was posted to the debit
side of his account.
(ii) ₹ 100 being purchases return was posted to the debit of
the Purchases Account.
(iii) Discount of ₹ 300 received was posted to the debit of
the Discount Account.
(iv) ₹ 374 paid for motor car repairs was debited to the
Motor Car Account as ₹ 174.
(v) ₹ 400 paid to Naman was debited to the account of
Manan.
Pass the Journal entries to rectify the above errors and
state what amount was carried to the Suspense Account.
[Suspense Account opened with a Credit of ₹ 1,680.]
BANK RECONCILIATION STATEMENT

1. A Bank Reconciliation Statement is prepared by:
(A) By Debtors (B) By Bank
(C) Account holder in a bank (D) By Creditors
2. Bank Reconciliation Statement is :

(A) An Account
(B) A subsidiary book
(C) Bank Column of the Cash Book
(D) A statement prepared to reconcile cash book and
pass book balance
3. Bank Reconciliation Statement is prepared on:
(A) At the end of each month
(C) On a certain date
(B) At the end of the year
(D) Before the preparation of final accounts
4. Objective of preparing a Bank Reconciliation
Statement is:
(A) To find out the balance of Cash Book
(B) To find out the bank balance
(C) To reconcile the cash balance of cash book
(D) To reconcile the bank balance of cash book with the
balance of pass book
5. A bank reconciliation statement is prepared with the
help of:
(A) Pass book and Cash Column of cash book
(B) Pass book and bank column of cash book
(C) Cash and bank column of cash book
6. A bank reconciliation statement is :
(A) A part of cash book
(B) A part of pass book
(C) A statement prepared by the bank
(D) A statement prepared by a customer
7. A bank reconciliation statement is prepared with the
balance of:
(A) Cash Book
(B) Pass Book
(C) Either Cash Book or Pass Book
(D) Neither Cash Book nor Pass Book
8. A bank reconciliation statement is prepared to
ascertain the causes of differences between :
(A) The balance as shown by the cash column of Cash
Book with the balance of the Pass Book
(B) The balance as shown by the bank column of Cash
Book with the balance of the Pass Book
(C) The balance as shown by the cash column of the
Cash Book with that shown by its bank column
(D) The balance as shown by the Cheque Book and Pass

Book
9. A bank reconciliation statement is prepared by:

(A) Bank (B) Customers of the Bank
(C) Creditors (D) Auditor
10. Pass book is a copy of:

(A) Bank transactions in the cash book
(B) Receipts and Payments of the business
(C) Customer's account prepared by the bank
(D) All cash and bank Transactions
11. Debit balance of cash book means:
(A) Positive i.e. Favourable Balance
(B) Negative i.e. Unfavourable Balance
(C) Either Positive or Negative Balance
12. Credit balance of cash book means:
13. Debit balance of pass book means:
14. Credit balance of pass book means:
15. Favourable bank balance means:
(A) Debit Balance in the Cash Book
(B) Credit Balance in the Pass Book
(C) Debit Balance in the Pass Book
(D) Both A and B
16. Unfavourable bank balance means:
(A) Credit Balance in the Cash Book
(B) Credit Balance in the Pass Book
(C) Debit Balance in the Cash Book
(D) Favourable Balance in the Cash Book
17. Unfavourable or Overdraft bank balance means:
(A) Credit Balance in the cash book
(B) Debit Balance in the Pass Book
(C) Credit Balance in the Pass Book
(D) Both A and B
18. Bank reconciliation statement is prepared with the
help of………….
(A) Balance as per Cash Book
(B) Balance as per Pass Book
(C) Balance as per Cash Book or Pass Book
19. If bank reconciliation statement is prepared from
the Debit balance of Cash Book, we will get:
(A) Credit Balance as per Pass Book
(B) Debit Balance as per Pass Book
(C) Credit Balance as per Cash Book
(D) None of the Above
20. If bank reconciliation statement is prepared from
the debit balance of Pass Book, we will get:
(A) Debit Balance as per Cash Book
(B) Credit Balance as per Cash Book
(C) Credit Balance as per Pass Book
21. Bank balance is always considered as positive, if it is:
(A) Balance as per Cash Book
(B) Debit Balance as per Cash Book
(C) Credit Balance as per Pass Book
22. Which of the following balance is true, Given:
(i) Dr. Balance as per Cash Book ₹ 32,000;
(ii) Cheques sent for collection but not yet collected ₹
10,000;
(iii) Cheques issued but not yet presented for payment ₹
12,000
(A) Dr. Balance as per Pass Book ₹ 34000
(B) Cr. Balance as per Pass Book ₹ 30,000
(C) Cr. Balance as per Pass Book ₹ 34,000
(D) Dr. Balance as per Pass Book ₹30,000
(i) Dr. Balance as per Cash Book ₹ 40,000;
(ii) Cheque deposited into bank for ₹ 25,000 but
cheques of only ₹ 16,000 were credited by bank:
(A) ₹ 56,000
(C) ₹ 49,000
(B) ₹ 24,000
(D) ₹ 31,000
(i) Dr. Balance as per cash Book ₹ 25,000;
(ii) Cheques issued for ₹ 18,000 out of which cheques of
only ₹ 4,000 were presented for payment:
(A) ₹ 39,000 (C) ₹ 29,000
(B) ₹ 11,000 (D) ₹ 21,000
ANSWER KEY: 1. C 2. D 3. C 4. D 5. B 6. D 7.
C 8. B 9. B 10. C 11. A 12. B 13. B 14. A
15. D 16. A 17. D 18. C 19. A 20. B 21. D
22. C 23. D 24. A
NUMERICAL QUESTIONS BRS

1. On 30th June, 2016, the bank Column of Anil's Cash
Book showed a balance of ₹ 8,250. On examination of
the Cash Book and bank statement you find that:
1. Out of total cheques amounting to ₹8,000 issued,
cheques amounting to ₹5,800 have been presented for
payment upto 30th June, 2016.
2. Out of total cheques amounting to ₹6,000 sent to
bank for collection, cheques of ₹4,100 were credited in
Pass Book upto 30th June, 2016.
3. On 28th June a customer deposited ₹3,500 direct in
the bank account but it was entered only in the Pass
Book.
4. Debit side of Anil's Cash Book (Bank Column) has
been overcast by ₹100.
5. No entry has been made in the Cash Book for the
Rent of ₹800 paid by bankers according to Anil's
standing instructions.
6. The Pass Book showed a credit of ₹320 for interest
and a debit of ₹40 for bank charges, but these have not
been entered in the Cash Book.
Prepare a Bank Reconciliation Statement as on 30th
June, 2016.
Ans- Balance as per pass book Rs. 11430
2. Prepare a Bank Reconciliation Statement of Ruchika Ltd.
as on 31st March, 2017 from the following information:
1. Credit Balance (Overdraft) as per Cash Book ₹ 25,000.
2. Cheques paid into bank for collection ₹60,000 but
cheques of ₹ 24,000 could only be collected in March,
2017.
3. A Cheque of ₹3,500 issued to a Creditor, was entered
by mistake in the Cash Column.
4. A Cheque of ₹ 10,000 issued on 22nd March was not
presented for payment whereas it was recorded twice
in the Cash Book.
5. A bill receivable for ₹ 8,000 previously discounted
with the bank had been dishonoured and bank charges
debited in the Pass Book amount to ₹ 125.
6. In the Cash Book, a bank charge of ₹ 150 was
recorded twice while another bank charge of ₹ 40 was
not recorded at all.
(Ans- Debit balance as per Pass Book ₹ 52515)
3. From the following information supplied by Sanjay,
prepare his Bank Reconciliation statement as on
December 31, 2016.
(i) Bank overdraft as per pass book ₹ 16,500
(ii) Cheques issued but not presented for payment ₹

8,750
(iii) Cheques deposited with the Bank but not collected

₹ 10,500
(iv) Cheques recorded in the cash book but not sent to
the bank for collection ₹ 2,000
(v) Payments received from customers directly by the
bank ₹ 3,500
(vi) Bank charges debited in the pass book ₹ 200
(vii) Premium on life policy of Sanjay paid by the bank
on standing advice ₹ 1,980
(viii) A bill for ₹ 3,000 (discounted with the bank in
November) dishonoured on December 31, 2016 and
noting charges paid by the bank ₹ 100
(Ans- overdraft as per cash book ₹ 10970)
4. From the following particulars prepare a Bank
Reconciliation Statement in the books of Sh. J.P. Kansal
as on 30th June 2016:-
I. Balance as per Pass Book on 30th June 2016 ₹ 6,000.
II. Out of total cheques amounting to ₹ 37,500 drawn by
Sh. Kansal, Cheques aggregating ₹ 5,000 were encashed
in June 2016, Cheques aggregating ₹ 4,000 were
encashed in July 2016 and the rest have not been
presented at all.
III. Out of total Cheques amounting to ₹ 12,000
deposited, Cheques aggregating ₹ 7,500 were credited
in June 2016, cheques aggregating ₹ 2,000 were
credited in July, 2016 and the rest have not been
collected at all.
IV. Bank has charged ₹ 27 as its commission for
collecting outstation cheques and has allowed interest ₹
330 on his bank balance.
V. Amount wrongly debited by bank ₹2,400.
VI. A cheque of ₹1,200 was entered in the Cash Book in
June 2016, but was sent to the Bank in July 2016.
VII. A cheque of ₹ 13,300 paid into the bank was
returned dishonoured but no intimation was received
from the bank till June 2016.
(Ans- overdraft balance as per cash book ₹ 5403)
FINANCIAL STATEMENTS WITHOUT ADJUSTMENTS
1. The purpose of preparing final accounts is to ascertain :
(A) Profit or loss
(C) The value of assets
(B) Capital
(D) Profit or loss and financial position
2. The Profit and Loss Account shows :
(A) Financial Position of the Concern
(B) Gross Profit
(C) Net Profit
(D) Net Profit and Financial Position
3. Balance Sheet shows :
(A) Profit or Loss (B) Financial Position
(C) Errors of Accounts (D) Total Debtors
4. Final Accounts are prepared:

(A) At the end of calendar year
(C) On every Diwali
(B) At the end of Assessment year
(D) At the end of Accounting year
5. Trading and Profit and Loss Account is prepared:
(A) For a particular period (C) For the whole year
(B) On a particular date (D) None of above
6. Balance Sheet is prepared:

(A) For a particular period (C) For the whole year
(B) On a particular date (D) None of the above
7. Excess of debit in Profit and Loss Account is called:

(A) Net Profit
(C) Gross Profit
(B) Net Loss
(D) Gross Loss
8. "Salaries and Wages" appearing in Trial Balance is
shown:
(A) On the Debit Side of Trading A/c
(B) On the Debit Side of P & L A/c
(C) On the Asset Side of Balance Sheet
(D) On the Liabilities Side of Balance Sheet
9. Balance Sheet is prepared with the balances of which of
the following:
(A) All balances in the Ledger
(B) Balances of Personal Accounts
(C) Balances of Real Accounts
(D) Balances of Personal and Real Accounts
10. Balance of Petty Cash is :
(A) Expenses (B) Income
(C) Liability (D) Asset

11. Fixed assets are kept:
(A) For earning revenue
(B) For conversion into cash as quickly as
possible
(C) For resale
(D) For getting loan by mortgage
12. Goodwill is:

(A) Current Asset
(B) Tangible Asset
(C) Intangible Asset
(D) Fictitious Asset
13. Choose the current assets from the following:
A. Cash
B. Stock
C. Debtors
D. All of these
14. Schedule of balances prepared from ledger accounts is
known as
A. Balance sheet
B. Trial balance
C. Statement of accounts
D. Statement of affairs
15. Closing Stock appearing in the Trial Balance is shown:
(A) On the Dr. side of Trading A/c
(B) On the Cr. side of Trading A/c
(C) On the Assets side of Balance Sheet
(D) On the Cr. side of Trading A/c and on the Assets side of
Balance Sheet
16. Calculate the gross profit if rate of gross profit is 25%
on sales and cost of goods sold are ₹ 1,80,000
(A) ₹ 60,000
(B) ₹ 36,000
(D) ₹30,000
(C) 45,000
17. Opening Stock ₹ 8,500
Purchases ₹ 30,700
Direct Wages ₹ 4,800
Interest on Loan₹ 2,800
Closing Stock ₹ 9,000
Cost of goods sold will be…………
(A) ₹ 30,000
(B) ₹ 32,000
(C)₹ 35,000
(D) ₹ 40,000
18. If sales are ₹2,000 and the rate of gross profit on cost of
goods sold is 25%, then the cost of goods sold will be:
(A)₹ 1600
(B)₹ 1,500
(C) ₹ 1700
(D) ₹ 1,800
19. Cost of Goods Sold ₹ 1,50,000; Closing Stock ₹ 40,000;
Opening Stock ₹ 60,000; Amount of purchase will be
(A) ₹ 1,30,000
(B) ₹ 1,70,000
(C) ₹ 50,000
(D) None of these
ANSWER KEY: 1. (D) 2. (C) 3. (B) 4. (D) 5. (A) 6. (B)
7. (B) 8. (B) 9. (D) 10. (D) 11. (A) 12. (C) 13. (D)
14. (B) 15. (C) 16. (A) 17. (C) 18. (A) 19. (A)
NUMERICAL QUESTIONS (WITHOUT ADJUSTMENTS)

1. From the following information, prepare the Trading
Account for the year ended 31st March, 2020:
Adjusted Purchases 15,00,000; Sales ₹ 21,40,000;
Returns Inwards ₹40,000; Freight and Packing ₹ 15,000;
Packing Expenses on Sales ₹ 20,000; Depreciation
₹36,000; Factory Expenses ₹60,000; Closing Stock ₹
1,20,000.
[Ans. Gross Profit ₹ 5,25,000]
2. Calculate Gross Profit from the following information:
Closing Stock ₹ 70000
Wages ₹ 40000
Salary ₹ 30000
Sales ₹ 688000
Adjusted Purchase ₹ 550000
[Ans. Gross Profit ₹ 98,000]
3. Calculate cost of goods sold from the following:

Opening Stock ₹ 40,000
Net Purchases ₹ 50,000
Net Sales ₹ 1,90,000
Wages & Salaries ₹ 10,000
Rent Paid ₹ 15,000
Closing Stock ₹ 15,000
[Ans. Cost of Goods Sold ₹85,000]
4. Ascertain cost of Goods Sold and Gross Profit from the
following:
Opening Stock ₹ 32000
Purchases ₹ 280000
Direct Expenses ₹ 20000
Indirect Expenses ₹ 45000
Closing Stock ₹ 50000
Sales ₹ 400000
Sales Returns ₹ 8000
[Ans. Cost of goods sold ₹ 2,82,000; Gross Profit
₹1,10,000.]
5. Calculate Gross Profit on the basis of the following
information:
Return Outwards ₹ 30000
Carriage Inwards ₹ 20000
Carriage Outwards ₹ 15000
Wages ₹ 50000
3/4 of the goods are sold for ₹6,00,000.
Ans. Gross Profit ₹60,000.
6. Calculate Closing Stock and Cost of Goods Sold:

Opening Stock ₹ 5,000; Sales ₹ 16,000; Carriage Inwards
₹ 1,000; Sales Returns ₹ 1,000; Gross Profit ₹ 6,000;
Purchase ₹ 10,000; Purchase Returns ₹ 900.
[Ans. Cost of Goods Sold ₹ 9,000; Closing Stock ₹ 6,100]
7. Calculate Closing Stock from the following:
Opening Stock ₹ 38000
Sales ₹ 360000
Return Outwards ₹ 4000
Freight Inwards ₹ 26000
Return Inwards ₹ 5000
Gross Loss ₹ 20000
Ans. Cost of Goods Sold ₹ 375000; Closing Stock ₹
25,000.
8. Calculate gross profit and cost of goods sold from the

following information:
Gross Profit is 40% on Sales
[Ans. Gross Profit ₹ 3,20,000; Cost of Goods Sold ₹
4,80,000]
9. Calculate the gross profit and cost of goods sold from

the following information:
Gross Profit is 20% on cost.
[Ans. Gross Profit: ₹ 1,50,000; Cost of Goods Sold: ₹
7,50,000]
10.Ascertain the value of closing stock from the following:
Opening Stock ₹ 1,20,000
Purchases during the year ₹ 9,30,000
Sales during the year ₹ 1560000
Rate of gross profit 40% on sales
(Ans- closing stock ₹ 114000)
FINANCIAL STATEMENTS WITH AJUSTMENTS

1. If ‘prepaid wages’ is given in trial balance, it is shown as
A. Debit of trading a/c
B. Debit of trading a/c and assets
C. Debit of P and L a/c
D. Assets
2. Outstanding Salary is :
(A) Real Account (B) Personal Account
(C) Nominal Account (D) None of these
3. If the manager is entitled to a commission of 5% on

profits before deducting his commission, he will get a
commission of ₹ ............. on a profit of ₹8,400.
(A) 400 (B) 442 (C) 420
4. Trial Balance contains the following information :
15% Bank Loan ₹ 40000
Interest Paid ₹ 4500
Interest debited to P & L A/c will be:
(A) ₹ 6,000
(C) ₹ 4,500
(B) ₹ 3,000
(D)₹ 1,500
5. In the Trial Balance are shown Debtors ₹ 2,400, Bad

Debts ₹ 221, Bad Debts Provision ₹ 324. For creating a
Provision for Doubtful debts @ 10% on debtors, the P &
L A/c will be debited by :
(A) 137
(C) 343
(B) 240
(D) 9
6. A's Trial Balance provides you the following
information:
Bad Debts ₹ 3000
Provision for Bad Debts ₹ 5000
It is desired to maintain a provision of ₹ 1500 for
doubtful debts, the amount to be recorded in P & L A/c
will be:
(A) ₹ 4,500 in Dr.
(C) ₹ 500 in Dr.
(B) ₹ 500 in Cr.
(D)₹ 3,500 in Dr.
7. Sundry Debtors given in the Trial Balance are ₹

20,000. Further bad debts amounted to ₹ 1,000 and
it is desired to create a provision of 5% on debtors
for doubtful debts and 2% for discount. Sundry
Debtors will appear in the Balance Sheet at a figure
of:
A) ₹ 18,620 (B)₹18,600
(C) ₹ 17,689
(D) ₹ 17,670
8. A trial balance contains Debtors ₹ 15,000, Bad
Debts ₹ 400 and Provision for Doubtful Debts ₹ 600.
Further bad debts given in adjustments are ₹ 400. If
a provision at 5% is made on Debtors, P & L A/c will
be debited with:
(A) ₹ 950 (C)₹ 930
(B)₹ 800 (D) ₹ 1,130
9. Income earned but not received is shown in :

(A) Liabilities
(C) Foot notes
(B) Assets
(D) None of them
10. Bills Receivable discounted but not due till the
date of final accounts is shown in:
(A) P&L A/c (B) Assets
(C) Liabilities (D) Foot notes
11. A new firm commenced business on 1st April,

2019 and purchased goods costing ₹ 90,000 during
the year. A sum of ₹ 6,000 was spent on freight
inward. At the end of the year (on 31st March,
2020) the cost of goods still unsold was ₹ 15,000
(Realisable Value ₹ 12,000). Sales during the year
was ₹ 1,20,000. What is the gross profit earned by
the firm?
(A)₹ 42,000
(B) ₹ 30,000
(C)₹ 36,000
(D) ₹ 39,000
12. Income tax paid by a sole trader is reflected in
his financial statements:
(A) On the debit side of the Trading Account
(B) On the debit side of the Profit and Loss Account
(C) As an asset in the Balance Sheet
(D) As way of deduction from capital in the Balance
Sheet
13. Insurance paid ₹4,000 (including premium of
₹3,000 per annum paid upto 30th June, 2020). What
will be the adjusting closing entry necessary as on
31st March, 2020:
(A) Insurance Prepaid A/c Dr. 750
To Insurance A/c 750
(B) Insurance A/c Dr. 750
To Insurance Prepaid A/c 750
(C) Insurance A/c Dr. 4,000
To Cash A/c 4,000
(D) Insurance A/c Dr. 3,000
To Cash A/c 3,000
14. Which of the following statements is correct :
(A) King's International P&L A/c as on 31st March,
2020
(B) King's International P & L A/c for the year ended
31st March
(C) King's International P & L A/c for the year ended
31st March, 2020
(D) King's International P&L A/c for the current year
(2019-2020)
15. Rent paid on 1st October, 2018 for one year upto
30th September, 2019 was ₹ 2,400. Rent paid on 1st
October, 2019 for the year upto 30th September,
2020 was ₹ 3200. Rent shown in profit and loss
account for the year ended on 31st December, 2019
would be
A. ₹ 6000 B. ₹ 3200
C. ₹ 3000 D. ₹ 2600
16. Accrued income is:
A. A liability B. Revenue
C. an asset D. An expense
17. If closing stock appears in trial balance then it
will be appearing in
A. trading account
B. balance sheet
C. profit and loss account
D. trading A/c and balance sheet
18. Types of account shown in balance sheet are…….
A. nominal and personal
B. real and nominal
C. real and personal
D. real, nominal and personal
19. Following information is given in the trial
balance
Bad Debt ₹ 3000
Provision for Bad Debts ₹ 3500
Debtors ₹ 40000
Additional information:
It is desired to make a provision for doubtful debts
@10% on debtors. The amount debited to P & L A/c
is:
A. ₹ 4000
B. ₹ 5000
C. ₹ 6500
D. ₹ 3500
20.Net profit before the following adjustments ₹ 180000
Outstanding salary ₹ 10000
Prepaid insurance ₹ 13000
Calculate profit after adjustments
A. ₹ 183000
B. ₹ 177000
C. ₹ 203000
D. ₹ 187000
21.Net profit of a firm before charging manager’s commission is ₹ 21000.
If the manager is entitled to 5% commission after charging such
commission, how much manager will get as commission?
A. ₹ 1050
B. ₹ 1000
C. ₹ 2100
D. ₹ 2000
22.Closing stock is shown in financial statements at:
A. Cost price
B. Realisable value
C. Cost price or realisable value whichever is greater
D. Cost price or realisable value whichever is less
23.General manager gets 10% commission on net profit after charging
such commission. Gross profit ₹ 70000 and general expenses other
than manager’s commission are ₹ 12000. Commission amount will be:
A. ₹ 5273
B. ₹ 6073
C. ₹ 5373
D. ₹ 5173
24.Heavy amount spent for the advertisement of new company product is
A. Revenue expenditure
B. Deferred revenue expenditure
C. Capital expenditure
D. Either A or C
25.Income tax in case of sole trader is treated as
A. Personal expense
B. Debtors expense
C. Business expense
26.Business paid to Mr. A ₹ 50000 as salary on 25th March, 2020. Mr. A
went to bank to deposit cheque in his account on 3rd April, 2020. What
is the entry to be passed in the balance sheet on the date of final
accounts?
A. No entry
B. Bank a/c Dr. To o/s salary a/c
C. Salary a/c Dr. To o/s salary a/c
D. Salary a/c Dr. To A
27.A machine was purchased in Bihar. During transit the machine was
damaged and the cost of repairs incurred is ₹ 20,000. This expense is
treated as:
A. Capital expense
B. Revenue expense
C. Deferred revenue expense
D. None of these
ANSWER KEY: 1. D 2. B 3. C 4. A 5. A 6. B 7. C 8. C
9. B 10. D 11. C 12. D 13. A 14. C 15. D 16. C
17. B 18. C 19. D 20. A 21. B 22. D 23. A 24. B
25. A 26. A 27. A
SOURCE DOCUMENTS:
1. Pick out a source voucher/document from the following
A. Debit voucher
B. Credit voucher
C. Transfer voucher
D. Invoice
2. When a trader sells goods on credit, he prepares ………. Which
contains the name of the party to whom goods are sold, the
rate, quantity and the total amount of sale
A. Cash memo
B. Invoice
C. Debit note
D. Receipt
3. Rohan has returned goods worth ₹ 20000 to Radheyshyam as he
found it defective. Which document will be prepared by
Radheyshyam?
A. Invoice/ bill
B. Debit note
C. Credit voucher
D. Credit note
4. Credit purchases of furniture will be recorded through which
voucher?
A. Debit voucher
B. Credit voucher
C. Cash voucher
D. Transfer voucher
ANSWER KEY: 1. D 2. B 3. D 4. D
BOOK OF ORIGINAL ENTRY- JOURNAL
1. Double entry system means

A. Recording of each transaction in two set of books
B. Entry of two aspects of every transaction
C. Two entries in one set of books
D. Entry in two real accounts
2. Journal is a book of:
A. Original entry
B. Final entry
C. Cash transactions
D. Non- cash transactions
3. Outstanding salary a/c is:
A. Personal account
B. Real account
C. Nominal account
D. All of the above
4. Prepaid expenses a/c is
A. Personal a/c
B. Real account
C. Nominal a/c
D. All of the above
5. Goodwill a/c is
A. Personal a/c
B. Real a/c
C. Nominal a/c
6. Which of the following is real a/c
A. Salary account
B. Debtor’s a/c
C. Expenses a/c
D. Stock a/c
7. Which of the following is nominal a/c
A. Goodwill a/c
B. Rent a/c
C. Bank a/c
D. Creditor’s a/c
8. Drawings A/c is:
(A) Personal Account (B) Real Account
(C) Nominal Account (D) None of the above
9. Capital A/c is:
(A) Natural Personal A/c (C) Representative Personal A/c
(B) Artificial Personal A/c (D) All of the above
10. "Debit what comes in and Credit what goes out" is the rule
of:
(A) Personal Account (C) Nominal Account
(B) Real Account (D) All of the above
11. Rule of "Debit the Receiver and Credit the Giver is" related
to:
(A) Personal Account (B) Real Account
(C) Nominal Account (D) None of the above
12. Outstanding Expenses A/c is:
(A) Artificial Personal Account
(B) Representative Personal Account
(C) Natural Personal Account
13. Rule of "debit the expenses losses and credit the incomes
and gains" applies to:
(A) Nominal Accounts (B) Real Accounts

(C) Personal Accounts (D) All of the Above
14. Example of Personal Account is:

(A) Sales Account (B) Goodwill Account
(C) Interest Account (D) Accrued Interest Account
15. Example of Natural Personal Account is:

(A) Bank Account (B) Drawings Account
(C) Outstanding Rent Account (D) Delhi University Account

16. Example of Artificial Personal Account is:
(A) Capital Account (B) Debtors Account
(C) Bank Account (D) Prepaid Expenses Account
17. Example of Representative Personal Account is:

(A) Outstanding Expenses Account
(B) Prepaid Expenses Account
(C) Accrued Commission Account
18. Purchase of goods from Raghu for cash will be credited to:
(A) Purchase Account (B) Raghu's Account
(C) Cash Account (D) Goods Account
19. Purchase of machine for cash will be debited to:

(A) Cash Account (C) Machine Account
(B) Purchases Account (D) None of these
20. Cash withdrawn by the Proprietor for personal use will
be credited to
(A) Personal Account (C) Drawing Account
(B) Capital Account (D) Cash Account
21. Goods taken by proprietor for personal use is called:
(A) Capital (B) Drawings
(C) Asset (D) Liability
22. No entry is made in the books of accounts of:

(A) Trade Discount
(C) Discount Allowed
(B) Cash Discount
(D) Discount Received
23. Goods sold to Mr. Dhoni for cash will be debited to:
(A) Dhoni's Account
(C) Goods Account
(B) Sales Account
(D) Cash Account
24. Computer purchased for office use should be debited
to:
(A) Office Expenses Account
(B) Office Equipment Account
(C) Purchases Account
(D) Miscellaneous Expenditure Account
25. Which account will be credited on giving the goods as
charity:
(A) Purchases Account
(C) Sales Account
(B) Drawings Account
(D) Charity Account
26. On taking goods for personal use by the proprietor, the
account debited will be:
(A) Purchases Account
(C) Drawings Account
(B) Sales Account
(D) Capital Account
27. Wages paid for the installation of a new machine will be
debited to:
(A) Wages Account
(C) Machinery Account
(B) Repairs Account
(D) Capital Account
28. Rent paid to Landlord should be debited to:
(A) Drawings Account (B) Landlord Account
(C) Rent Account (D) Personal Account
29. On selling old newspapers, the account credited should

be:
(A) Sales Account (B) Miscellaneous Income Account
(C) Goods Account (D) Cash Account
30. The journal entry for goods sold to Gopal for cash
should include:
(A) Debit to Gopal and Credit to Sales
(B) Debit to Sales and Credit to Cash
(C) Debit to Cash and Credit to Gopal
(D) Debit to Cash and Credit to Sales
31. X returned goods for ₹2,000 to us. The account debited
will be:
(A) Goods Account
(C) Return Inward Account
(B) X's Account
(D) Return Outward Account
32. Journal records the transactions of a firm in a
A. Periodical manner
B. Chronological order
C. Summarised manner
D. Systematic manner
ANWER KEY: 1. B 2.A 3. A 4. A 5. B 6. D 7. B 8.
A 9. A 10. B 11. A 12. B 13. A 14. D 15. B 16.
C 17. D 18. C 19. C 20. D 21. B 22. A 23. D
24. B 25. A 26. C 27. C 28. C 29. B 30. D
31. C 32. B
CASH BOOK
1. When a firm maintains a cash book, it need not maintain
(A) Journal Proper
(C) Sales Book
(B) Purchase Book
(D) Cash and Bank Accounts in Ledger
2. Double Column Cash Book records :
(A) Only cash transactions
(B) Only credit transactions
(C) Cash and Bank transactions
(D) All transactions
3. Goods sold for cash are recorded in the
(A) Sales Book (B) Cash Book
(C) Sales Return Book (D) Petty Cash Book
4. Main objective of maintaining cash book is

(A) To ascertain the capital of the business
(B) To ascertain the cash purchases of the business
(C) To ascertain the cash sales of the business
(D) To ascertain the cash balance of the business
5. Cash Book does not record transactions of:
(A) Cash Nature
(B) Credit Nature
(C) Cash and Credit Nature
(D) None of these
6. Cash Book maintains record of:
(A) All cash purchases and sales
(B) All cash receipts
(C) All cash payments
(D) All cash receipts and payments
7. Credit transactions are recorded in the cash book
(A) In Debit
(C) In Debit or Credit
(B) In Credit
(D) Neither in Debit nor in Credit
8. The balance of cash column of cash book always shows
a ............... balance.
(A) Debit (B) Credit
(C) Either Debit or Credit (D) Neither debit nor credit
9. The balance of bank column of cash book always shows
a…………….. balance.
(A) Debit
(B) Credit
(C) Either Debit or Credit
(D) Neither Debit nor Credit
10. Discount column of cash book is .............
(A) Totalled and not Balanced
(B) Neither totalled nor balanced
(C) Balanced
(D) Not balanced
11. Debit balance of bank account in cash book shows:
(A) Total amount deposited into the bank
(B) Total amount withdrawn from the bank
(C) Deposit amount in the bank
(D) Overdraft
12. On 1st April, 2020, balance of cash column of cash book
was ₹ 40,000. After receiving interest ₹ 800 from bank,
withdrawing ₹ 8,000 from bank and after purchasing goods
for ₹ 15,000 at 10% cash discount, the balance of cash will
be:
(A) ₹ 35,300
(B) ₹ 19,300
(C) ₹ 33,000
(D) ₹ 34,500
13. Features of cash book is:
(A) Debit and Credit Side
(B) Part of Ledger
(C) Recording of cash and bank transactions
14. Similarity of Cash Book and Journal is
(A) Recording in both is made from source documents
(B) Transactions are recorded in both in chronological order
(C) Both have ledger folio column
15. Transactions on the credit side of bank column of cash
book depict :
(A) Amount deposited in bank
(B) Amount withdrawn from Bank
(C) Amount deposited as well as withdrawn from bank
16. The types of two columnar cash book are
(A) Cash and Discount columns
(B) Bank and Discount columns
(C) Cash and Bank Columns
17. Similarity of Cash book and Ledger is:
(A) Format of cash book resembles to a ledger
(B) Cash book is balanced just like a ledger account
(C) The words To and By are used in both
18. Which of the following will be recorded as Contra-entry
(A) Cash directly deposited into bank by a customer
(B) Payment made to creditor by cheque
(C) Cash deposited into bank
(D) Cash sales
19. A cheque received and deposited into bank the same
day will be recorded in cash book in
(A) Cash column on debit side
(B) Cash column on credit side
(C) Bank column on debit side
(D)Bank column on credit side
20. Interest allowed by bank will be recorded in the cash

book in
(A) Bank column on debit side
(B) Bank column on credit side
(C) Cash column on debit side
(D)Cash column on credit side
21. Cash discount received will be recorded in cash book in:
(A) Discount column on debit side
(B) Discount column on credit side
(D) Cash column on credit side
22. When a cheque deposited into bank is dishonoured by
bank, it will be recorded in cash book in:
(A) Bank column on debit side
(D) Cash column on credit side
23. Bad debts will be recorded in cash book in:
(A) Cash column on credit side
(C) Discount column on credit side
24. Trade Discount allowed will be recorded in cash book
in:
(A) Cash column on Credit side
(B) Discount column on debit side
(C) Discount column on credit side
25. On 1st April 2020, balance of cash column of cash book
was Rs. 10,000. After receiving Rs. 2,000 from Anil, giving a
cheque of Rs. 3,200 to Sunil and making payment of wages
Rs. 500, balance of cash will be:
(A) Rs. 11,500
(C) Rs. 8,800
(B) Rs. 8,300
(D) Rs. 6,300
26. On 1st May 2020, cash book bank overdraft balance
was Rs. 2,000. On depositing Rs. 10,000 into bank and
giving a cheque of Rs. 7,200 for rent, the balance will be:
(A) Rs. 4,800 Dr.
(C) Rs. 800 Dr.
(B) Rs. 4,800 Cr.
(D) Rs. 800 Cr.
27 Which of the following statements is true:
(A) Cash Book is a journal and not a ledger
(B) Cash Book is a ledger and not a journal
(C) Cash Book is both a journal and a ledger
(D) Cash Book is neither a journal nor a ledger
28. When a cheque received is not deposited into the bank
on the same day, it is recorded in cash book in
(A) Cash column on debit side and bank column on credit
side
(B) Cash column on debit side
(C) Bank column on debit side
29. Which of the following is not recorded in cash book:
(A) Trade Discount
(B) Bad Debts
(C) Credit Purchases
30. Which is not contra entry in the cash book
(A) Cash deposited into bank
(B) Cash withdrawn from bank
(C) Cash withdrawn from bank for personal use
(D) None of these
31. If the debit as well as credit aspects of a transaction are

recorded in the cash book, it is called……………
(A) Contra Entry
(B) Compound Entry
(C) Opening Entry
(D) Adjustment Entry
32. The balance of petty cash is:

(A) Expenses
(B) Profit
(C) Asset
(D) Liability
33. Petty cash book is maintained to record

(A) All expenses
(B) All petty expenses
(C) All petty expenses which are paid in cash
(D) All petty cash receipts
34. Which of the following is a contra entry:

(A) Cash sales deposited into bank immediately
(B) Cheque received and deposited into bank on the same
day
(C) Cheque received on previous day deposited into bank
on the next day
(D) A customer directly deposited money in our bank
Account
35. Cash book is a type of................ but can be treated as

a ............. of account.
(A) Subsidiary Book, Principal Book
(B) Principal Book, Subsidiary Book
(C) Subsidiary Book, Subsidiary Book
(D) Principal Book, Principal Book
36. Which of the following may have both Dr. or Cr. Balance
(A) Only cash column of cash book
(B) Only bank column of cash book
(C) Both cash and bank column
(D) Neither bank nor cash column
37. Imprest amount Rs. 5,000. What will be the amount of
re-imbursement if following expenses were incurred by the
petty cashier during the month Wages = Rs. 1,450, Tiffin =
Rs. 1,050, small Repairs = Rs. 500, General expenses =
Rs. 400.
(A) Rs. 1,600
(B) Rs. 3,400
(C) Rs. 3,050
(D) Rs. 3,000
38. Salary due for the month of March will appear in .......
side of cash book
(A) Receipt
(B) Payment
(C) Contra
39. Petty cash book is prepared on which system?
ANSWER KEY- 1. (D) 2. (C) 3. (B) 4. (D) 5. (B)

6. (D) 7. (D) 8. (A) 9. (C) 10. (A) 11. (C)
12. (D) 13. (D) 14. (D) 15. (B) 16. (D) 17. (D)
18. (C) 19. (C) 20. (A) 21. (B) 22. (B) 23. (D)
24. (D) 25. (A) 26. (C) 27. (C) 28. (D) 29. (D)
30. (C) 31. (A) 32. (C) 33. (C) 34. (C) 35. (A)
36. (B) 37. (B) 38. (D)
NUMERICAL QUESTIONS OF CASH BOOK

1. Prepare two column cash book from the following
transactions of Raj Mohan for the month of april, 2016.
2016 Particulars Amt.

Apr 1 Cash in hand 70000
Bank overdraft 66000
Apr 2 Cash purchases ₹ 8000 less trade
discount @10%
Apr 3 4000
Sold goods to raja on credit
8000
Purchased goods on credit from
Apr 4 Rajesh 7000
Apr 5 Wages paid 85000
Apr 7 Cash sales 60000
Purchased goods from Manisha
Apr 9 for ₹ 61250 paid by cheque in 50000
Apr 10 full settlement 25000
Purchased furniture for cash
Apr 11 Cash paid to Sarika discount
received ₹ 500
Apr 13 Cheque issued to Manisha was 22500
Apr 16 dishonoured 2500
Cash sales
Apr 18 35000
Bank charged interest on
Apr 20 3000
overdraft
Apr 25 115000
Deposited into bank
Paid telephone bill by cheque
Sold goods for ₹ 117500 to
Apr 27 Sachin and received cheque in 4000
Apr 29 full settlement (deposited same 5000
Apr 30 day) 10000
Apr 30 Paid rent 12500
Drew cash for personal use
Paid salary
Interest collected by bank
(Ans- cash balance ₹ 34300; bank balance ₹ 91000)
2. Prepare a double column cash book (cash and bank)
from the following transactions.
2022
Aug 1 Cash in hand ₹ 1200; overdraft at bank ₹ 15000
Aug 3 Further capital introduced ₹ 20,000 out of
which ₹ 16000 deposited in the bank
Aug 4 Purchased goods from Vrijesh traders
amounting to ₹ 3000 and they allowed trade discount
₹ 200. The amount was paid by cheque.
Aug 4 Goods purchased for cash ₹ 4000
Aug 5 Sold goods to Varun on credit ₹ 5000
Aug 6 Received cheque from Sidhartha ₹ 2450
Allowed him discount ₹ 50
Aug 10 Cheque received from SIdhartha deposited
into bank
Aug 11 Settled the account of superstar printers ₹
750 by paying cash ₹ 680
Aug 12 Cash received from Varun ₹ 4750 in full
settlement of his account of ₹ 5000
Aug 16 An amount of ₹ 1000 due from Kartik
brothers written off as bad debts in the previous year,
now recovered
Aug 17 Received from Kunal on behalf of Karan ₹
200
Aug 19 Received a cheque for ₹ 800 from Adarsh,
which was endorsed to Partha on 24th august
Aug 20 Sale of old furniture, payment received in
cash for ₹ 720
Aug 25 Cashed a cheque for ₹ 3000
Aug 25 Drew from bank for household expenses ₹
1000 and for income tax ₹ 500
Aug 28 Amit who owed ₹ 400 became bankrupt and
paid 60 paise in a rupee
Aug 28 Received repayment of a loan ₹ 3000 and
deposited out of it ₹ 2500 into the bank.
Aug 30 Interest debited by the bank ₹ 375
Aug 30 Deposited with the bank the entire balance
after retaining ₹ 2000 at office.
(Ans- cash balance ₹ 2000; bank balance ₹ 7205)
SPECIAL PURPOSE SUBSIDIARY BOOKS

1. Subsidiary Books are:
(A) Purchase Book (B) Sales Return Book
(C) Bills Receivable Book (D) All of the above
2. Purchase book is used to record:

(A) Purchases of goods (B) Credit Purchases of goods
(C) Credit Purchases of asset (D) All credit Purchases
3. Purchase return book is used to record:

(A) Return of goods purchased for cash
(B) Return of goods purchased on credit
(C) Return of assets purchased on credit
(D) All purchase returns
4. The advantages of Purchase Book are:

(A) Knowledge of total price of goods purchased on credit
(B) Price of goods purchased from each supplier
(C) Easiness in preparing ledger
5. Debit notes issued are used to prepare :

(A) Purchases Return Book
(C) Purchases Book
(B) Sales Return Book
(D) Sales Book
6…………is not a subsidiary book

(A) Purchase Return Book
(B) Bills Payable Book
(C) Ledger
(D) Sales Book
7. Sales book is used to record:

(A) All credit sales
(B) Credit sale of asset
(C) Credit sale of goods
(D) All credit and cash sales
8. Sales return book is used to record
(A) Return of goods sold for cash
(B) Return of goods sold on credit
(C) All sales returns
(D) Return of assets sold on credit
9. The advantages of Sales Book are:
(A) Knowledge of total price of goods sold on credit
(B) Price of goods sold to each party
(C) Easiness in preparing Trading Account
10. Recording is made in purchases book:
(A) After deducting trade discount
(B) After adding trade discount
(C) After deducting cash discount
(D) After adding cash discount
11. Purchases amount is recorded
(A) After deducting Trade Discount
(B) After adding sales tax
(C) After adding carriage charges etc. paid by the seller
12. Total of Purchase Column in Purchase Book is posted to:
(A) Purchases A/c - Dr.
(C) Sales A/c - Dr.
(B) Purchases A/c-Cr.
(D) Sales A/c-Cr.
13. Purchase of asset on credit is recorded in:
(A) Purchases Book
(C) Cash Book
(B) Purchases Return Book
(D) Journal Proper
14. Debit Note is the source of writing:
(A) A debit entry in an Account
(B) A sale to a person
(C) Sales Return Book
(D) Journal Proper
15. A separate column is made for 'Credit Note No.' in
(A) Purchases Book
(B) Sales Book
(C) Purchases Return Book
(D) Sales Return Book
16. Purchases Book is a part of:

(A) The Journal
(B) The Ledger
(C) The Trading Account
(D) The Balance Sheet
17. In case lesser amount is recorded in sales invoice by

mistake, then a………… is sent
(A) Debit Note (C) Cash Note
(B) Credit Note (D) Debit or Credit Note
18. A trader made the following transactions. Total of
Purchase Book on the basis of these transactions will be:
(i) Goods purchased from Gaurav ₹ 8,000
(ii) Goods purchased from Sudhir for Cash ₹ 10,000
(iii) Goods purchased from Kamal on credit ₹ 25,000
(iv) Machinery purchased from Dinesh on credit ₹ 40,000
(A) ₹ 83,000
(C) ₹ 33,000
(B) ₹ 73,000
(D) ₹ 25,000
19. Goods taken away by the proprietor from business for
his personal use will be recorded in:
(A) Purchases Book
(B) Sales Book
(C) Purchases Return Book
(D) Journal Proper
20. Recording is made in journal proper of:
(A) All transactions
(B) Those transactions which are not recorded in any
subsidiary book.
(C) All cash transactions
(D) All credit Transactions
21. Recording is made in Journal Proper of:
(A) Opening Entries
(C) Adjustment Entries
(B) Closing Entries
22. Asset sold on credit will be recorded in:
(A) Sales Book
(B) Journal Proper
(C) Sales Return Book
(D) Petty Cash Book
23. The balance of sales column in the sales day book is
₹30,000. ₹ 5,000 recovered from debtors. Then balance of
sales column will be transferred which amount?
(A) ₹ 25,000
(B) ₹ 30,000
(C) ₹ 20,000
(D) ₹ 35,000
24. A note sent by buyer on return of goods is
(A) Credit Note
(C) Debit Note
(B) Return Note
(D) None of these
25. Goods sold for Cash ₹ 25,000 plus 12% IGST. Sales A/c
will be credited by
(A) ₹ 22,000 (B) ₹ 25,000
(C) ₹ 28,000 (D) None of these
26. Purchase of furniture on credit should be recorded in
(A) Journal
(C) Cash Book
(B) Purchase Book
(D) Journal Proper
27. A................. is sent to a supplier when we return goods.
(A) Debit Note
(B) Credit Note
(C) Proforma Invoice
(D) None of these
ANSWER KEY- 1. (D) 2. (B) 3. (B) 4. (D) 5. (A) 6. (C)
7. (C) 8. (B) 9. (D) 10. (A) 11. (D) 12. (A) 13. (D)
14.(A) 15.(D) 16.(A) 17. (A) 18. (C) 19. (D) 20. (B)
21.(D) 22. (B) 23. (B) 24. (C) 25. (B) 26. (D)
27. (A)
NUMERICAL SPECIAL PURPOSE SUBSIDIARY BOOKS

1. Sharma bros. carry on a business as wholesale cloth
dealer. From the following information write up the
purchases book for January 2022.
2022
Jan 3 purchased from m/s birla mills, Kolkata:
100 pieces long cloth @ ₹ 800 each
50 pieces shirting @ ₹ 500 each
Jan 8 purchased for cash from m/s ambika mills,
Ahmedabad:
50 pieces muslin @ ₹ 1000 each
Jan 15 purchased from m/s arvind mills, Ahmedabad:
20 pieces coating @ ₹ 2,000 each
10 pieces shirting @ ₹ 500 each
Jan 20 purchased from m/s bharat computers ltd,
Kolkata:
5 printers @ ₹ 4400 each
(Ans- total of purchases book ₹ 150000)
2. Prepare sales book from the following tranactions:
2022
April 1 Sold to m/s gupta furniture house, Delhi:
100 chairs @ ₹ 1500 per chair
40 tables @ ₹ 2000 per table
Less: trade discount @5%
April 10 Sold to m/s ajit singh and sons, Kolkata:
150 desks @ ₹ 1000 per desk
160 chairs @ ₹ 1500 per chair
Less: Trade discount @5%
April 15 Sold to m/s ideal furniture house, Darjeeling:
10 sofa sets @ ₹ 75000 each
5 almirahs @ ₹ 3000 each
25 round tables @ ₹ 4000 each
Less: trade discount @10%
(Ans- total of sales book ₹ 13,67,500)
3. Prepare purchases and sales book from the following
transactions of Kishan, Bangalore:
2021
Jan 1 Bought from m/s Uma Dutt, Mumbai:
1000 registers @ ₹ 80 each
50 reams paper @ ₹ 250 per ream
Less: trade discount 25%
Jan 2 Sold to shri dayal, Bengaluru:
Jan 8 Bought from BILT, Delhi:
100 reams ruled paper @ ₹ 600 per ream
Jan 12 Sold to gupta bros, Delhi:
Jan 18 Sold to ram saran das:
20 copies double entry book keeping @ ₹ 85
each
Jan 25 Bought from hari ram, Delhi:
1000 pens @ ₹ 10 each
Jan 31 Sold to Rishi Kumar, Bengaluru:
(Ans- Total of purchases book ₹ 1,28,875; total of sales
book ₹ 1,39,087)
LEDGER
1. The book in which all the accounts are opened, is
called:
(A) Journal
(C) Ledger
(B) Cash Book
(D) Subsidiary Book
2. The main object of keeping the ledger is:
(A) To ascertain the profit & loss of business
(B) To ascertain the financial position of the
business
(C) To ascertain the debtors and creditors of the
business
(D) To ascertain the net result of all transactions of
one nature
3. A Ledger is a :
(A) Principal Book
(C) Cash Book
(B) Subsidiary Book
(D) Purchase Book
4. When all the transactions related to an account
are collected at one place, it is known as:
(A) Trial Balance (B) Balance Sheet
(C) Journal (D) Ledger
5. A Ledger maintains:
(A) Personal Accounts
(B) Real Accounts
(C) Nominal Accounts
6. The process of transferring entries from the
books of original entry is called:
(A) Journalising
(C) Totalling
(B) Posting
(D) Balancing
7. A Ledger is a :
(A) Book of Original Entry
(B) Book of Final Entry
(C) Subsidiary Book
(D) Cash Book
8. Advantages of Ledger are:
(A) Information of purchases and sales during a

particular period
(B) Information of income and expenditure during a
particular period
(C) Information of assets and liabilities of the
business
9. Posting of a transaction means entering of that
transaction in:
(A) Any two accounts
(B) Debit side of the concerned account
(C) Credit side of the concerned account
(D) Proper side of the two concerned accounts
10. Debit balance of a personal account shows
(A) Amount Payable
(B) Amount Receivable
(C) Amount payable or receivable
(D) Cash Balance
11. Credit balance of a personal account shows:
(A) Profit
(C) Asset
(B) Loss
(D) Liability
12. Debit balance of a real account shows :
(A) Income (B) Expenditure
13. Debit balance of a nominal account shows:

(A) Income
(C) Profit
(B) Expenditure
(D) Liability
14. Credit balance of a nominal account shows:

(A) Income (B) Expenditure
15. When total of debit side of an account exceeds

than that of its credit side, it is called:
(A) Debit Balance (B) Credit Balance
(C) Expenses (D) Income
16. Debit balances show:

(A) Profits and Incomes (B) Liabilities and Incomes
(C) Assets and Expenses (D) None of the Above
17. Credit balances show:
(A) Losses and Expenses (B) Liabilities and Incomes
(C) Assets and Expenses (D) All of the above
18. Amount of sales can be ascertained from which

of the following:
(A) Journal (C) Sales Book
(B) Cash book (D) Sales Account
19. Credit balance of Bank Account discloses :
(A) Income
(B) Expenditure
(C) Amount payable by the bank
(D) Amount payable to the bank
20. Which of the following accounts always shows a
credit balance
(A) Carriage Inward
(C) Return Inwards
(B) Carriage Outward
(D) Returns Outwards
21. Which of the following accounts always shows a
debit balance:
(A) Drawings A/c
(C) Returns Inwards A/c
(B) Purchases A/c
(D) All of the Above
22. While posting in personal accounts from the
purchases book, posting is done:
(A) On Debit side
(C) On Debit or Credit side
(B) On Credit side
sales book, posting is done:
(A) On Debit side
(B) On Credit side
purchases return book, posting is done :
(A) On Debit side
(B) On Credit side
sales return book, posting is done:
(A) On Debit side (B) On Credit side
(C) On Debit or Credit side (D) None of the above
26. Which of the following account always shows a
debit balance:
(A) Capital Account

(B) Sales Account
(C) Purchases Return Account
27. The posting of accounts recorded on the debit

side of cash book is made:
(A) On Debit side
(B) On Credit side
28. The total of purchases book will be posted to
the:
(A) Debit side of Purchases A/c
(B) Credit side of Purchases A/c
(C) Debit side of Purchases Return A/c
(D) Credit side of Purchases Return A/c
29. The total of sales book will be posted to the:
(A) Debit side of Sales A/c
(C) Debit side of Sales Return A/c
(B) Credit side of Sales A/c
(D) Credit side of Sales Return A/c
30. Received ₹ 4,900 from Garima in full settlement
of ₹ 5,000. Posting of ₹ 100 will be made to the:
(A) Debit side of Garima's A/c
(B) Credit side of Garima's A/c
(C) Debit side of Discount A/c
(D)Credit side of Discount A/c
31. Received ₹ 7,500 from Ritika in full settlement of
₹8,000. Posting will be made in Ritika's A/c:
(A) ₹ 7,500 on Debit side
(C) ₹ 8,000 on Debit side
(B) ₹ 7,500 on Credit side
(D) ₹ 8,000 on Credit side
32. Paid to Vishakha ₹ 14,000 in full settlement of ₹
15,000. Posting of ₹ 1,000 will be made to the:
(A) Debit side of Discount A/c
(B) Credit side of Discount A/c
(C) Debit side of Vishakha's A/c
(D) Credit side of Vishakha's A/c
33.Paid to Jigyasa ₹ 11,500 in full settlement of ₹
12,000. Posting will be made in Jigyasa's A/c:
34. Proprietor of the business withdrew goods from
business for private use. It will be posted to the:
(A) Credit of Drawings A/c
(C) Credit of Purchases A/c
(B) Debit of Purchases A/c
35. The total of Purchases Return Column of
Purchase Return Book will be posted to the:
(A) Debit of Purchases A/c
(B) Credit of Purchases A/c
(C) Debit side of Purchases Return A/c
(D) Credit side of Purchases Return A/c
36. The total of Sales Return Column of Sales Return
Book will be posted to the :
(A) Debit of Sales A/c
(B) Credit of Sales A/c
(C) Debit side of Sales Return A/c
(D) Credit side of Sales Return A/c
37. Purchased goods from Manoj of ₹ 20,000 at 20%
trade discount. Posting will be made in Manoj A/c:
(A) Debit side ₹ 20,000 (C) Debit side ₹ 16,000
(B) Credit side ₹ 20,000 (D) Credit side ₹ 16,000
38. Goods returned to X will be posted to:
(A) Credit of X's A/c
(B) Debit of Purchases Return A/c
(C) Credit of Purchases Return A/c
(D) Credit of Sales Return A/c
39. Goods returned from Vikas will be posted to
the:
(A) Credit of Sales Return A/c
(B) Debit of Purchases Return A/c
(C) Debit of Vikas A/c
(D) Credit of Vikas A/c
40. Dinesh who owed us ₹ 8,000 became insolvent
and paid us 60% in full settlement. Posting will be
made to Dinesh A/c:
41. Total assets in a business are ₹8,00,000 and

total liabilities are ₹5,00,000. The difference is
called:
(A) Income
(C) Capital
(B) Expenses
(D) Goodwill
42. Sold goods for cash of the list price of ₹8,000 at
10% trade discount and 3% cash discount. Posting
will be made in Discount A/c:
(A) ₹ 216 on Debit side
(C) ₹ 240 on Debit side
(B) ₹ 216 on Credit side
(D) ₹ 240 on Credit side
43. Sold goods for cash of the list price of ₹ 10,000
at 20% trade discount and 5% cash discount. Posting
will be made in Sales A/c:
Paid to
44. The words 'To Balance b/d' and 'By Balance b/d'
are recorded in the 'Particular Column' at the time
of posting of.
(A) Compound Entries
(C) Opening Entry
(B) Adjusting Entries
(D) Closing Entry
45. Normally, the following accounts are balanced:
(A) Personal A/c & Nominal A/c
(B) Real A/c & Nominal A/c
(C) Only Nominal A/c
(D) Personal A/c & Real A/c
46. Which of these accounts has debit balance?
(A) Income received in advance
(B) Bank loan
(C) Prepaid insurance premium
(D) Creditors for goods
47. Which of the following is known as "Principal
Book of Accounting"?
(A) Ledger
(C) Trial balance
(B) Journal
(D) Balance sheet
48. The credit balance of a personal account is
(A) Cash in hand
(B) Amount receivable
(C) Income earned
(D) Amount payable
ANSWER KEY: 1. (C) 2. (D) 3. (A) 4. (D) 5. (D)

6. (B) 7. (B) 8. (D) 9. (D) 10. (B) 11. (D) 12. (C)
13. (B) 14. (A) 15. (A) 16. (C) 17. (B) 18. (D)
19. (D) 20 (D) 21. (D) 22. (B) 23. (A) 24. (A)
25. (B) 26. (D) 27. (B) 28. (A) 29. (B) 30. (C)
31. (D) 32. (B) 33. (A) 34. (C) 35. (D) 36. (C)
37. (D) 38. (C) 39. (D) 40. (B) 41. (C) 42. (A)
43. (D) 44. (C) 45. (D) 46. (C) 47. (A) 48. (D)

QUESTION BANK Class 11

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QUESTION BANK Class 11

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QUESTION BANK

1. Basic function of financial accounting is to:

15. Use of common unit of measurement and common format of reporting

16. Which of the following is included in Qualitative characteristics of accounting

BASIC ACCOUNTING TERMS

5. Current assets do not include:

(A) Stock (B) Short term investment

(C) Prepaid expenses (D) Unearned income

6. Tangible Asset is:

10. Current Liabilities include:

14. A person to whom money is owed by the firm is call...................0

21. Tangible Assets do not include:

(C) Stock (D) Cash

23. Wasting Assets do not include:

26. Patent is:

27. Maruti Car is :

Current Liability would include:

(B) Made by man

(D) None of the above

2. Accounting principles mean :

3. Various names of accounting principles are :

(A) Assumptions (B) Conventions

(C) Concepts (D) All of the above

4. According to Business Entity Concept:

(A) Business is treated as a separate unit from its owner

(B) Business is not treated as a separate unit from its owner

(C) Personal transactions of owner are not distinguished from business

(D) None of the above

5. According to Money Measurement Concept only those transactions are

(A) Which are capable of being expressed in terms of

(B) Which cannot be expressed in terms of money

(C) both of the above transactions

(D) None of the above

6. As per Going Concern Concept business will continue to exist :

(A) For a limited period

(B) For 10 years

(C) For 25 years

(D) For a long period in the future

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

(A) From 1st January to 31st December

(B) From 1st April to 31st March

(C) From 1st July to 30th June

(D) From Diwali to Diwali

8. As per Cost Concept, an asset is recorded in the books

(A) At market value

(C) At the price at which it was acquired

9. As per Dual Aspect Concept:

(B) Assets = Capital - Liabilities

(C) Assets = Liabilities + Capital

(D) Capital = Assets + Liabilities

10. Accounting Period concept means:

(A) A period of 12 months

(C) Indefinite period

(B) A period of 6 months

(D) Period fixed by management

(A) Double Account System

(B) Double Entry System

(C) Double Book System

(D) All of the above

12. As per Revenue Recognition Concept, revenue is deemed to be realised

(A) When purchase order is received from the purchaser

(B) When goods are delivered to the purchaser