ACCOUNTING PROCESS MCQ | NCERTBOOKSPDF.COM

Double entry accounting requires that
a. All transactions that create debits to asset accounts must create credits to liability or capital accounts
b. A transaction that requires a debit to a liability account require a credit to an asset account
c. Every transaction must be recorded with equal debits equal total credits.
d. All of the above
Answer
Answer: C
Pick the right one
a. Capital increases by net profit and fresh capital introduced, decreases by drawings and net loss
b. Capital decreased by net profit and fresh capital introduced, increases by drawings and net loss
c. Capital remains static and is not influenced by net profit and drawing and loss
d. Capital always increases irrespective of profit and loss of the business.
Answer
Answer: A
State whether true or false
Debit always means increase and credit always means decrease
a. True b. False
Answer
Answer: B
The ledger folio column of journal is used to
a. Record the date on which amount posted to a ledger account.
b. Record the number of ledger account to which information is posted.
c. Record the number of amounts posted to the ledger account.
d. Record the page number of the ledger account.
Answer
Answer: B
The journal entry to record the sale of services on credit should include
a. Debit to debtors and credit to capital. b. Debit to cash and Credit to debtors.
c. Debit to fees income and Credit to debtors. d. Debit to debtors and Credit to fees income.
Answer
Answer: D
The journal entry to record purchase of equipment for Rs. 2,00,000 cash and a balance of Rs. 8,00,000 due in 30 days include
a. Equipment Account Dr. ₹ 200000
To Bank/Cash Account ₹ 200000
b. Equipment Account Dr. ₹ 1000000
To Bank/Cash Account ₹ 200000
To Creditor Account ₹ 800000
c. Equipment Account Dr. ₹ 800000
To Creditor Account ₹ 800000
d. Equipment Account Dr. ₹ 1000000
To Bank/Cash Account ₹ 1000000
Answer
Answer: B
When an entry is made in journal
a. Assets are listed first. b. Accounts to be debited listed first.
c. Accounts to be credited listed first. d. Accounts may be listed in any order.
Answer
Answer: B
If a transaction is properly analysed and recorded
a. Only two accounts will be used to record the transaction.
b. One account will be used to record transaction.
c. One account balance will increase and another will decrease.
d. Total amount debited will equals total amount credited.
Answer
Answer: D
The journal entry to record payment of monthly bill will include
a. Debit monthly bill and Credit capital. b. Debit capital and Credit cash.
c. Debit monthly bill and Credit cash. d. Debit monthly bill and Credit creditors.
Answer
Answer: C
Journal entry to record salaries will include
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a. Debit salaries Credit cash. b. Debit capital Credit cash.
c. Debit cash Credit salary. d. Debit salary Credit creditors.
Answer
Answer: A
Issued a cheque for Rs.8,000 to pay rent. The account to be debited is
a. Cash/Bank Account b. Rent Account
c. Building Account d. Maintenance Account
Answer
Answer: B
Collected Rs. 35,000 from debtors. The account to be credited is
a. Creditor Accounts b. Cash/Bank Account
c. Debtor Account d. Capital Account
Answer
Answer: C
Purchased office stationary for Rs. 18,000. The account to be credited is
a. Cash/Bank Account b. Stationery Account
c. Purchase Account d. Debtor Account
Answer
Answer: A
Purchased new machine for Rs. 1,70,000 and issued cheque for the same. The journal entry will be
a. Purchase Account Dr. ₹ 170000
To Bank/Cash Account ₹ 170000
b. Bank/Cash Account Dr. ₹ 170000
To Purchase Account ₹ 170000
c. Bank/Cash Account Dr. ₹ 170000
To Machinery Account ₹ 170000
d. Machinery Account Dr. ₹ 170000
To Bank/Cash Account ₹ 170000
Answer
Answer: D
Issued cheque for Rs. 70,000 to pay off on of the creditors. The journal entry will be
a. Creditor Account Dr. ₹ 70000
To Bank Account ₹ 70000
b. Debtor Account Dr. ₹ 70000
To Bank Account ₹ 70000
c. Bank Account Dr. ₹ 70000
To Creditor Account ₹ 70000
d. Bank Account Dr. ₹ 70000
To Debtor Account ₹ 70000
Answer
Answer: A
Returned damaged office stationary and received Rs. 50,000. The journal entry will be
a. Stationery Account Dr. ₹ 50000
To Cash Account ₹ 50000
b. Cash Account Dr. ₹ 50000
To Stationery Account ₹ 50000
c. Purchase Account Dr. ₹ 50000
To Cash Account ₹ 50000
b. Cash Account Dr. ₹ 50000
To Purchase Account ₹ 50000
Answer
Answer: B
Provided services for Rs. 65,000 on credit. The accounting need to be done as
a. Creditor Account Dr. ₹ 65000
To Sale/Fee Accounts ₹ 65000
b. Debtor Account Dr. ₹ 65000
To Sale/Fee Account ₹ 65000
c. Sale Account Dr. ₹ 65000
To Creditor Account ₹ 65000
d. Sale Account Dr. ₹ 65000
To Debtor Account ₹ 65000
Answer
Answer: B
Voucher is prepared for
a. Cash received and paid b. Cash/Credit sales
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c. Cash/Credit purchase d. All of the above
Answer
Answer: D
Voucher is prepared from
a. Documentary evidence b. Journal entry
c. Ledger account d. All of the above
Answer
Answer: A
How many sides does an account have?
a. Two b. Three
c. one d. None of These
Answer
Answer: A
A purchase of machine for cash should be debited to
a. Cash account b. Machine account
c. Purchase account d. None of these
Answer
Answer: B
Which of the following is correct?
a. Liabilities = Assets + Capital b. Assets = Liabilities – Capital
c. Capital = Assets – Liabilities d. Capital = Assets + Liabilities.
Answer
Answer: C
Cash withdrawn by the Proprietor should be credited to
a. Drawings account b. Capital account
c. Profit and loss account d. Cash account
Answer
Answer: D
Find the correct statement
a. Credit an increase in assets b. Credit an increase in expenses
c. Debit the increase in revenue d. Credit an increase in capital
Answer
Answer: D
The book in which all accounts are maintained is known as
a. Cash Book b. Journal
c. Purchases Book d. Ledger
Answer
Answer: D
Recording of transaction in the Journal is called
a. Casting b. Posting
c. Journalising d. Recording
Answer
Answer: C
When a firm maintains a cash book, it need not maintain
a. Journal Proper b. Purchases (journal) book
c. Sales (journal) book d. Bank and cash account in the ledger
Answer
Answer: D
Double column cash book records
a. All transactions b. Cash and bank transactions
c. Only cash transactions d. Only credit transactions
Answer
Answer: B
Goods purchased on cash are recorded in the
a. Purchases (journal) book b. Sales (journal) book
c. Cash book d. Purchases return (journal) book
Answer
Answer: C
Cash book does not record transaction of
a. Cash nature b. Credit nature
c. Cash and credit nature d. None of these
Answer
Answer: B
Total of these transactions is posted in purchase account
a. Purchase of furniture b. Cash and credit purchase
c. Purchases return d. Purchase of stationery
Answer
Answer: B
The periodic total of sales return journal is posted to
a. Sales account b. Goods account
c. Purchases return account d. Sales return account
Answer
Answer: D
Credit balance of bank account in cash book shows
a. Overdraft b. Cash deposited in our bank
c. Cash withdrawn from bank d. None of these
Answer
Answer: A
The periodic total of purchases return journal is posted to
a. Purchase account b. Profit and loss account
c. Purchase returns account d. Furniture account

Answer
Answer: C
Balancing of account means
a. Total of debit side b. Total of credit side
c. Difference in total of debit & credit d. None of these
Answer
Answer: C
Cash book is a
a. Original journal b. Subsidiary journal
c. Original Ledger b. All of the above
Answer
Answer: B
In Journal proper, discount recorded is/are
a. Cash Discount b. Trade Discount
c. Both A & B d. Neither A nor B
Answer
Answer: A
Return of goods purchased on credit to the suppliers will be entered in
a. Purchase Journal. b. Purchase Return Journal
c. Journal Proper d. Any of the above
Answer
Answer: B
Assets sold on credit are entered in
a. Purchase Journal. b. Purchase Return Journal
c. Journal Proper d. Assets Journal
Answer
Answer: C
Double column cash book records transaction relating to
a. Cash and Bank b. Cash and Credit
c. Capital and Revenue d. All of the above
Answer
Answer: A
Total of the cash on debit side of cash book is always
a. more than the total on its credit side b. Less than the total on its credit side
c. either more or equal to total on its credit side d. either less or equal to total on its credit side
Answer
Answer: C
Cash book does not record the transactions of
a. cash b. Credit
c. Capital d. Credit and Capital
Answer
Answer: B
The amount paid to the petty cashier at the beginning of a period is known as
a. Imprest b. Corpus
c. Reserve d. Temporary Advance
Answer
Answer: A
In purchase book transactions are recorded for goods purchased on
a. Cash b. Credit
c. Gift/Grant d. All of the above
Answer
Answer: B
A Journal is a book of
a. Primary entry b. Secondary entry
c. Original Entry d. All of the above
Answer
Answer: C
One debit account and more than one credit account or vice versa in an entry is called
a. Contra entry b. Complex entry
c. multiple entry d. compound entry.
Answer
Answer: D
Assets sold on credit are entered in
a. sales journal b. Assets Journal
c. Debtor Journal d. Journal Proper
Answer
Answer: D
Transactions that cannot be recorded in any special journal are recorded in journal called the
a. Journal Proper b. Ordinary Journal
c. Journal Simple d. General Journal
Answer
Answer: A
Cash book records transactions relating to
a. Receipts and Payments b. Incomes and Expenditures
c. Profits and Losses d. Assets and Liabilities
Answer
Answer: A
Ledger is a
a. Original Book b. Subsidiary book
c. Both A & B d. Neither A & B
Answer
Answer: B
Accounting Book that is meant to record small and petty nature payment is

a. Petty Cash Book b. Associate Cash Book c. Departmental Cash Book d. Daily Cash Book
Answer
Answer: A
Cash transaction is recorded in cash book on
a. receipt debit side and payment credit side b. receipt credit side and payment debit side
c. Cash receipt debit side, receipt in cheque/draft on credit side and cash payment credit side and payment in cheque debit side
d. Cash receipt credit side, receipt in cheque/draft on debit side and cash payment debit side and payment in cheque credit side
Answer
Answer: A
Transaction recorded simultaneously both on debit and credit side of cash book arising out of a single transaction is known as
a. complex entry b. contra entry.
c. compound entry d. Equilibrium entry
Answer
Answer: B
Balancing of account means
a. total of debit side b. total of credit side
c. total of debit side and credit side d. figure out the difference between debit and credit
Answer
Answer: C
Credit purchase of machine is entered in
a. Purchase Journal b. Machine Account
c. Both purchase journal and machine account d. Either purchase journal and machine account
Answer
Answer: B
The accounting vouchers are based on
a. supporting documents b. Cash book entry
c. Journal entry d. All of the above
Answer
Answer: A
Which of the is source document
a. Cash Book b. Ledge
c. Subsidiary Cash Book/Ledger d. Invoice/bill
Answer
Answer: D
Both debit and Credit aspects of a transaction are shown by
a. receipt vouchers b. payment vouchers
c. contra vouchers d. transfer vouchers
Answer
Answer: D
The explanation of a Journal entry is known as
a. Annotation b. Narration
c. Noting d. Particular
Answer
Answer: B
In a Journal entry preposition used before the name of the account to be credited is
a. by b. for
c. to d. on
Answer
Answer: C
A combination of two or more simple journal entries is known as
a. complex entry b. difficult entry
c. mixed entry d. compound entry
Answer
Answer: D
Trade discount is
a. recorded in seller’s account and not recorded in buyer’s accounts
b. recorded in buyer’s account and not recorded in seller’s accounts
c. not recorded in both seller’s and buyer’s accounts
d. recorded in both seller’s and buyer’s accounts
Answer
Answer: C
In the journal Prepaid Expenses are
a. debited b. credited
c. contra entry made d. not entered
Answer
Answer: A
Accrued Income is
a. credited in the journal. b. debited in the journal.
c. c. contra entry made d. not entered
Answer
Answer: B
Depreciation is a. Cost of a fixed asset b. Cost of a fixed asset’s repair
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c. The residual value of a fixed asset d. Portion of a fixed asset’s cost consumed during the current accounting period
Answer
Answer: D
Trial balance shows the accumulated depreciation as a a. debit item b. credit item c. contra entry d. It doesn’t show
Answer
Answer: A
When the proprietor- withdraws money from the business for his personal use, then
a. Capital Account Dr
To Cash Account
b. Drawing Account Dr
To Cash Account
c. Drawing Account Dr
To Capital Account
d. Capital Account Dr.
To drawing Account
Answer
Answer: B
When the payment is to be made by the debtor, under a written agreement it is
a. bills payable b. bills receivable
c. advance d. contingent
Answer
Answer: A
An order made by the creditor to his debtor to make the payment on a specified date is known as
a. Bills of exchange b. Promissory Note
c. Cheque/draft d. Negotiable Instruments
Answer
Answer: B
The Revenue and expense accounts are closed by taking the balances to
a. Trading & Profit Account b. Profit & Loss Account
c. Balance Sheet d. Statement of Affairs
Answer
Answer: B
When a cheque is received from a customer but not deposited into the Bank on the same day, it will be recorded on
a. debits side in bank column b. credit side in cash column
c. debit side in cash column d. credit side in bank column
Answer
Answer: C
When transactions relate to both cash and bank side of Bank Column Cash Book, Such transactions are known as
a. Contra entry b. adjusting entry
c. balancing entry d. compound entry
Answer
Answer: A
When cheque received from customer is given to some other party it is called
a. Negotiate b. Transfer
c. Exchange d. Endorsement
Answer
Answer: D
If some errors committed during an accounting year are not located and rectified before the finalisation of financial statements, suspense account will
a. be closed by transferring the amount to cash/bank account
b. be closed by transferring the amount to Sale/Fee account
c. not be closed and carried forward to the next accounting period
d. not be closed but will be carry forward under Capital Account

Answer

Answer: C

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