ACCOUNTANCY FOR CLASS XI STUDENTS - MCQs

MULTIPLE CHOICE QUESTIONS

Theory base of Accounting

According to Principle of Conservatism a.       Provision is made for bad and doubtful debts b.      Depreciation is charged on assets c.       Recording is made of outstanding expenses d.      All of the above Ans: a. According to the cost concept a.       Assets are recorded at lower of cost and market value b.      Assets are recorded by estimating the market value at the time of purchase c.       Assets are not recorded d.      Assets are recorded at the value paid for acquiring it. Ans: a. The owner of the firm records his medical expenses in the firm’s income statement. Indicate the principle that is violated a.       Cost principle b.      Prudence c.       Full disclosure d.      Entity concept Ans: c Due to which of the following, contingent liabilities are shown in the Balance Sheet: a.       Dual aspect b.      Full disclosure c.       Materiality d.      Going concern Ans: b. According to which principle the same accounting methods should be used each year: a.       Prudence b.      Full disclosure c.       Materiality d.      Consistency Ans: d Accrual concept is based on a.       Matching principle b.      Dual aspect c.       Cost d.      Going concern Ans: a Income is measured on the basis of a.       Matching concept b.      Consistency c.       Cost d.      None of the above Ans: c Omission of paise and showing the round figures in financial statements is based on a.       Conservatism b.      Consistency c.       Materiality d.      Money measurement Ans: c Which of these is not a fundamental accounting assumption? a.       Going concern b.      Consistency c.       Accrual d.      Materiality Ans: a Due to which principle qualitative transactions are not recorded in the books a.       Business entity b.      Money measurement c.       Historical cost d.      Dual aspect Ans: b

BASIC ACCOUNTING TERMS 1.      Current liability includes -------- a)      Bills payable  b)  creditors   c) o/s expenses  d) all of these 2.      Current asset do not include --- a)      debtors b) motor car c) bank balance d) pre paid expenses 3.      tangible asset do not include ---- a)      goodwill  b) furniture  c) stock d) cash in hand 4.      Which of the following is capital expenditure? a)      Wages  b) wages paid for building construction  c) repair expenses of building d) advertisement expenses 5.      Cash  discount is ----- a)      Which is allowed at the time of making the payment   b) allowed at the time of sale of goods  c) received at the time of purchases of goods d)received both at the time of making payment and purchase of goods. 6.      Purchases refers to the buying of -------- a) stationery for office use  b) assets for the factory  c) goods of resale  d) investment 7.      A person who owes money to the firm is called ----- a)      Debtor b) creditor c) supplier d) none of these 8.      Out of the following assets which one is not an intangible asset? a)      Patents b) investment c) goodwill d) trade mark 9.      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 d) all of the above. 10.  Main feature of business transaction is ------ a)      An economic activity b) change in the financial position of the firm c) express in terms of money d) all of the above

Accounting standard 1.      Which accounting standard is applicable for valuation of inventories?  (a) AS -1  (b) AS-2  (c) AS-3  (d)As-4 2.      How many standards are issued by ICAI which are mandatory? (a)28     (b)32   (c)10   (d) none of these 3.      Which accounting standard is applicable for Fixed assets.? . (a) AS- 1 (b) AS-10 (c) AS-19 (d)AS-18 4.      Which accounting standard is applicable for intangible assets? . (a) AS- 10 (b) AS-6 (c) AS-26 (d)AS-3 5.      Which accounting standard is applicable for depreciation accounting? (a)    As-6 (b) AS-9 (c)AS-1 (d)AS-3 6.      Which accounting standard is applicable for revenue recoginition? (a)    AS-9 (b) AS-10 (c)As-3 (d)AS-23 7.      Which accounting standard is applicable for cash flow statement? (a) AS- 1 (b) AS-10 (c) AS-19 (d)AS-3 8.      Which accounting standard is applicable for contingencies and events occurring after the balance sheet date? (a)    AS- 1 (b) AS-10 (c) AS-4 (d)AS-18 9.      Which accounting standard is applicable for impairment of assets? (a)    AS- 1 (b) AS-10 (c) AS-19 (d)AS-28 10.  Which accounting standard is withdrawn and included in AS-26? (a)    AS-3     (b) AS-8  (c) AS-23 (d) none of these 11.  Under which section of companies Act,1956 accounting standard  are specified by Chartered Accountants? (a)    U/S 201 (b) U/S 112 (c) U/s 211 (d) none of these 12.  How many standards are issued by ICAI which are mandatory? (a)28     (b)32   (c)10   (d) none of these        13. how many IFRS are issued by the IASB?                (a) 10  (b) nil  (c)23  (d)32 ANSWERS: 1. (b) 2. (b) 3.(b)4(c) 5(a) 6(a) 7(d)8(c) 9(d) 10(b) 11(c) 12(b) 13(a)

3.Recording of transaction

Recording of transactions Group 3 Multiple choice questions 1.      Which of the following may have both Dr or Cr balance? a.       Only cash column of the cash book b.      Only bank column of the cash book c.        Both cash and bank column d.      Neither cash or bank balance Ans. (b) 2.      Salary due for the month  of march will appear in ………… side of the  cash book. a.       Receipt b.      Payment c.       Contra d.      None of the above. Ans. (d) 3.      ……………… is not  a subsidiary book. a.       Purchase book b.      Purchases return book c.       Sales book d.      Ledger Ans. Ledger 4.      Recording  is made in journal proper of a.       Opening entries b.      Closing entries c.       Adjustment entries d.      All of the above Ans. (d) 5.      A …………. Is sent  to a supplier when we return goods. a.       Debit note b.      Credit note c.       Proforma invoice d.       None of these Ans. (a) 6.      Personal accounts are related to : a.       Assets and liabilities b.      Expenses, losses and incomes c.       Debtors and creditors Ans. (c) 7.      Goods worth Rs 7,000 were given away as charity would be credited to : a.       Sales a/c b.      Purchases a/c c.       Charity a/c d.       Trustee a/c Ans. (b) 8.      Loss of goods by fire should be credited to a.       Sales a/c b.      Loss a/c c.       Profit and loss a/c d.      Purchases a/c ans. (d) 9.      Pick out a source voucher / document from the following: a.       Debit voucher b.      Credit voucher c.       Cash voucher d.      Transfer voucher Ans. (d) 10.  Credit purchase of  furniture will be recorded  through which voucher ? a.   Debit voucher b.   Credit voucher c.   Cash voucher d.   Transfer voucher ans. (d)

4.Trial Balance and Bank reconciliation statement

Bank reconciliation statement, Ledger and trial balance 1.       A Bank Reconciliation Statement is : a. A part of cash book  b) A part of pass book c) A statement prepared by bank      d) A statement prepared by a customer 2.       A pass book is a copy of             a) A customer’s account in the bank’s books b) cash book rel;ating to bank column        c) cash book relating to cash column d) firm’s receipts and payments 3.       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 4. Unfavourable bank balances 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 5. While posting in personal accounts from the purchases book, posting is done:    a) on debit side  b) on credit side  c) on debit or credit side   d) none of the above 6. Which of the following accounts always shows a debit balance :    a) capital account b) sales account  c) purchase return account d) none of these 7. Which of the following is known as Principal book of Accounting?    a) Ledger b) Journal c) Trial balance d) Balance sheet                   8. The credit balance of a personal account is...    a) cash in hand  b) amount receivable c) income earned  d) amount payable 9. Which items shows a debit balance in the Trial Balance:    a) Purchase return  b) salary outstanding  c) sales d) prepaid expenses 10. Which item shows a credit balance in the Trial Balance:    a) sales returns b) commission paid c) purchase returns d) salary

5.Depreciation, Provisions and Reserve

Q1.which method of depreciation is approved by income tax act a)      REDUCING BALANCE METHODE METHOD b)      Straight line method c)      Annuity method d)     None of these Q2. Amortization referred to writing off a)      Depleting b)      Wasting assets c)      Intangible asset d)     Fictitious asset Q3. Which of the following best describe depreciation A)    Valuation og fixed assets at the end of the year B)    Verification of the assest C)    Decreasing the market value of asset D)    Allocation of cost of fixed asset over its use full life Q4. Depreciation is calculated from the date of a)      Purchase of assets b)      Receipt of assets at business premises c)      Intangible asset d)     Assets installed Q5. x ltd purchase a machine on 1stjuly 2012 for rs 50000 depreciation is to charge @10% pa. what will be the amount of depreciation if the books are closed on 31st march every year. a)5000 b) 3750 c) 10000 d)5000 Q6. X ltd sold a machine for Rs. 55000 at a loss of Rs. 5000 on which depreciation has been charged Rs. 12000. The cost of machine was a)      62000 b)     72000 c)      55000 d)     50000 Q7. In WDV method depreciation is charged on a)      Cost price b)      Market price c)      Reduced Value d)     Non on these Q8. In this method of depreciation the value of the asset will be zero at the end of its use full life e)      WDV METHOD f)       Straight line method g)      Annuity method h)      None of these Q9. The book value of asset was  after charging 3  year depreciation @ 10 % pa is rs 7290. What was thw cost of the machine a)      10000 b)      11000 c)      8000 d)     9000 Q10. In which method of depreciation equal amount of depreciation debited to p/l  a/c. a)WDV METHOD b)Straight line method c)Annuity method d)None of these.

6.Accounting for Bill of Exchange

1.      A BILL OF EXCHANGE HAS PARTIES A.    2 B.     3 C.     4 D.    6 Ans: a 2.      The party which is ordered to pay the amount of bill of exchange is called A.    Drawer B.     Drawee C.     Payee D.    Endorsee Answer: b 3.      The party which is entitled to receive the payment of the bill is known as A.    Drawer B.     Drawee C.     Bank D.    Payee Ans:d 4.      A bill is drawn on 31th January due date after 1 month will be A.    4 march B.     3 march C.     28 feb D.    2 march Anw: b 5.      Bill of exchange is a conditional order to pay  the bill A.    Within the month B.     When the bank asks C.     On due date D.    When the drawer asks Ans: c 6.      When noting charges are paid by the bank at the time of dishonour of bill the drawee credits A.    Drawer B.     Payee C.     Bank D.    Endorsee Ans: a 7.      When calculating the due date of the bill how many days are added as days of grace A.    4 B.     3 C.     2 D.    0 Ans: b 8.      Encashing the bill before the due date is called A.    Endorsement B.     Retirement C.     Discount D.    Bills sent for collection Ans: b 9.      One who draws the bill is the A.    Creditor B.     Debtor C.     Bank D.    Chartered accountant Ans: a 10.  Noting charges are to be paid to A.    Income tax department B.     Court C.     Notary D.    Company secretary Ans: c

7.Rectification of Errors

Q1. On the basis of nature of errors, all the errors can be divided into. (1) 3   (2) 4   (3) 5  (4) 10    Ans (5) Q2. Error of commission committed due to the following (1)Wrong Recording (2)Wrong casting (3)Wrong posting (4) All of these  Ans—All of these Q3. Errors of Omission means (1)Errors of complete omission (2)Errors of partial omission (3)Both of them (4) None of them          Ans Both of them Q4. In compensating errors how many errors are committed. (1) 4   (2)  7 (3)2    (4)9          Ans 2 Q5. Account which is opened to put the different in the trial balance by some name so that trial balance can be tallied. (1) Personal A/C (2)Real A/C (3)Suspense A/C (4) None of these Ans Suspense A/c Q6. One sided Errors are Located before which account. (1)Closing Account (2)Opening Account (3)Both (4) None of these Ans Closing Account Q7.  Credit sale to shiv for Rs 20,000 was recorded as Rs 2,000 which error is this (1)Commission  (2)omission (3) principle (4)Compensating  Ans(1) Q8. Rs 550 enter as 500 which type of error (1) Omission (2)Commision (3)Principle (4) Compensating Q9 Suspense is (1) Nominal (2) real (3) personal (4) unreal Q10. Charity expense is credit to sales (1)charity    dr to sales (2)charity    cr  sales  cr (1)charity    dr  sales    dr (1)charity    cr  sales    dr

8.Financial Statements of sole proprietorship

Q11. Arrange in the order of liquidity in the B/S—Cash ,Building Goodwill, Debtors , Machine. (1) Debtors Cash ,Building Goodwill, , Machine. (2) Cash , Goodwill, Debtors , Machine. Building (3) Cash ,Building Goodwill, Debtors , Cash Machine. (4) Cash , Debtors , Machine. Building Goodwill. Ans.  (4) Q12. Profit earn throught normal activities of business (1) operating profit (2) net profit (3) gross profit (4)manufacturing profit. Ans. (1) Q13.Expenditure of recurring nature are (1)Captial (2)Revenue (3) Defered revenue (4)preminary. Ans. (2) Q14. Which is example of Fictituos Assets (1)Building (2)Bill receible (3)Adverting suspense (4)cash Ans. (3) Q15. Custom duty will go to (1) Trading cr (2) Trading dr (3)Profit &Loss dr (4) Profit &Loss cr. Ans. (2) Q16 TRADE MARK Is (1) Tangible assets (2)Fixed assets (3) Current assets (4)Liabilty. Ans. (1) Q17 Which of the following is position statement (1) Trial balance (2) Profit & Loss (3)BRS (4)Balance sheet Ans. (4) Q18. Gross loss is find from which account (1)Trading account (2)Profit &Loss account (3)Balance sheet (4)None of these. Ans. (1) Q19. By Profit &Loss account we get (1) net profit (2) capital (3) gross profit (4) gross loss. Ans. (1) Q20.  closing stock is entered in (1) trading account (2) balance sheet (3) both (d) none of these. Ans. (3)

9.Financial statements of not-for-profit organisations

Non Profit organisation      1. Receipts and payments account generally shows:                a) a debit balance b) a credit balance c) surplus or deficit d) capital fund       2. Income and expenditure account records transactions of:           a) revenue nature only b) capital nature only c) both revenue and  capital  nature  d) income of only revenue nature and expenditure of revenue and capital nature 3. Income and expenditure account reveals :    a) surplus or deficiency b) cash in hand  c) net profit d) capital account 4. Subscription received by a school for organising annual function is treated as:    a) capital receipt b) revenue receipt c) asset d) earned income 5. Amount received from sale of grass by a club should be treated as :    a) capital receipt b) revenue receipt c) asset d) earned income 6. Subscription received in advance during the current year is:    a) an income b) an asset c) a liability d) none of these 7. Subscription received in cash during the year amounted to Rs. 60,000; subscription received in advance for next year was Rs. 3000  and received in advance during previous year was Rs. 2000. subscription in arrear at the end of current year was Rs. 5,400. The amount credited to income & expenditure account will be:     a)53,600 b) 66,400 c) 55,600 d) 64,400 8. Life membership fee received by an institution is a ......... receipt.    a) capital b) revenue c)personal d) real 9. Entrance fees is treated as .......... receipt.    a) capital b) revenue c)personal d) real 10. Subsription outsatnding in case of a club are sown on the ........... side of the Balance Sheet.     a) Assets b) liablities c) none of these

10.Accounts form incomplete records

Single entry systems Multiple choice questions 1.      Single entry systems are maintained by (a)    Company (b)income tax authorities (c) govt. (d)sole trader 2.      Single entry system of book keeping is (a)    Simple      (b)  unauthorized by tax authorities (c) unscientific (d) all of these 3.      If closing capital is >opening capital, it denotes (a)    Loss   (b) profit (c) no profit no loss (d) profit, if there is no introduction of fresh capital 4.      If closing capital is < opening capital , it denotes that (b)Loss   (b) profit (c) no profit no loss (d)loss, if there is no introduction of fresh capital 5.      If capital at the end of the year is 40,000: capital introduced during the year Rs. 30,000; drawings 20,000 and loss for the year is 60,000; then Capital at the beginning of the year was: (a) 90,000 (b) 80,000 (c) 70,000 (d) 10,000 6.      If capital at the end of the year is 50,000: capital introduced during the year Rs. 30,000; drawings 20,000 and profit for the year is 60,000; then Capital at the beginning of the year (a)    60,000 (b)30,000 (c)20,000 (d) 35,000 7.      Profit = capital at the end+drawings-additional capital-………….. (a)    Opening capital (b) closing capital (c) loss (d) none of these 8.      What should be added in closing capital for calculating opening capital? (a)    Loss and drawing  (b) profit and drawing (c) profit only (d) loss only 9.      When the amount of closing capital (after adjusting drawings ) is less than that of opening capital the difference will be treated as:- (a)    Loss (b) profit (c)additional capital (d) none of them 10.  If opening capital is 24,000; closing capital40,000 ; drawing  7,000; fresh capital 8,000. Calculate profit or loss. (a)    Profit 15,000   (b) loss 15,000 (c) profit 20,000 (d) loss 20,000 Answers:1(d)  2(d)  3(d) 4(d)5(a)6(a) 7(a) 8(b) 9(a) 10(a)