Financial Accounting multiple choice questions-3

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51.    Bank Account is a … Account :

1. Personal                                                            2. Real

3. Nominal                                                             4. Fictitious

52.    Which of the following Account is Real a/c ?

1. Salaries                                                             2. Shares and debentures of companies

3. Debtors account                                               4. Bank account

53.    Insurance un expired account is :

1. Personal a/c                                                      2. Nominal a/c

3. Real a/c                                                             4. Fictitious a/c

54.    Provision for doubtful debts account is a … account :

1. Real account                                                     2. Personal account

3. nominal Account                                               4. None of these

55.    Goodwill a/c is a … Account .

1. Real                                                                   2. Personal

3. Nominal                                                             4. None of these

56.    A club’s account would be a … account .

1. Real                                                                   2. Personal

3. Nominal                                                             4. Fictitious

57.    A proprietor’s drawing account is a … account

1. Real                                                                   2. Personal

3. Nominal                                                             4. Fictitious

58.    The rule ‘Debit what comes in and credit what goes out’ is applicable to :

1. Real accounts                                                   2. Personal accounts

3. Nominal accounts                                             4. Fictitious accounts

59.    Purchases account is a … account

1. Real                                                                   2. Nominal

3. Personal                                                            4. None of these

60.  Salary prepaid account is a … account ?

1. Real a/c                                                             2. Personal a/c

3. Nominal a/c                                                       4. Fictitious

61.  Sales Return account is a … account ?

1. Real                                                                   2. Personal

3. Nominal                                                             4. Fictitious

62.  What type of account is a trading account ?

1. Real                                                                   2. Personal

3. Nominal                                                             4. None of these

63.  Debit means :

1. Decrease in assets                                           2. Increase in liabilities

3. An entry on the left hand side of an account    4. None of these

64.  Purchases book is an example of … Journal :

1. General book                                                    2. Special book

3. Both 1 & 2                                                         4. None of these

65.  All loses and expenses are :

1. Credited                                                            2. Debited

3. Both 1 & 2                                                         4. None of these

66.  Sales Journal is also called :

1. Day book                                                          2. Invoice book

3. special book                                                      4. None of these

67.  Salary paid in advance falls on the side :

1. Debit                                                                  2. Credit

3. Both 1 & 2                                                         4. None of these

68.  Ledger is a book in which ?

1.    Only real accounts are opened

2.    Only real and personal accounts are opened

3.    All the real, personal & nominal accounts are opened

4.    None of these

69.  The trial balance shows ?

1. Both debits and credit balance                         2. Only debit balance

3. Only credit balance                                           4. None of these

70.  Cash Account always what ?

1. Credit balance                                                   2. Debit balance

3. Both 1 & 2                                                         4. None of these

71.  In Book-keeping posting means ?

1.    To record the transactions from the Journal to ledger

2.    To record the transactions in Journal

3.    Both 1 and 2 is correct

4.    None of these

72.  The basic rule of book-keeping, “debit the receiver and credit the giver” is applicable to :

1. Real account                                                     2. Nominal account

3. personal account                                              4. None of these

73.  The basic rule of book-keeping “ debit the all loses and expenses and credit that all income and gains”

1. Nominal account                                               2. Real account

3. Personal account                                              4. None of these

74.  The credit balance of bank account indicate :

1. Amount payable by the bank                            2. Amount payable to the bank

3. Cash at bank                                                     4. None of these

75.  Which of the following accounts will invariably have a debit balance ?

1. Bank Account                                                   2. Accounts receivable account

3. Accounts payable account                               4. Loan account

76.  Which of the following accounts will invariably have a credit balance ?

1. Discount account                                              2. Accounts payable account

3. Cash account                                                    4. None of these

ANSWERS

51.1     52.2     53.1     54.3     55.1     56.1     57.2     58.1     59.1     60.2

61.2     62.2     63.3     64.2     65.2     66.1     67.1     68.3     69.1     70.2     71.1     72.3

73.1     74.2     75.2     76.2

Financial Accounting multiple choice questions-2

Greetings to fellow blog readers.....

1.    Window dressing is prohibited by the :

1. Accural concept                                                2. Convention of disclosure

3. Convention of conservatism                             4. Convention of materiality

2.    Qualitative transactions are not recorded in the accounts due to :

1. Accrual concept                                                2. Dual concept

3. Convention of materiality                                  4. Money measurement concept

3.    The concept of realization would imply ?

1.    When order is received

2.    When cash is received from debtors

3.    When goods are delivered to customer

4.    Meeting the plan targets

4.    Which of the following is the users of Accounting ?

1. Share holders                                                    2. Creditors

3. Labour                                                               4. All of the above

5.    Which of the following is correct equation ?

1. Assets = Liabilities + Capital                             2. Assets = Capital – Liabilities

3. Capital = Assets – Liabilities                             4. Both 1 & 3

6.    Financial Accounting is preparation of Accounting generally on what basis ?

1. Accrual basis                                                    2. Historical basis

3. Future basis                                                      4. None of these

7.    Which of the following represents the Accounting equation ?

1. Capital + Liabilities – Assets = 0                       2. Assets – Liabilities – Capital = 0

3. Liabilities = Assets – capital                              4. All of the above

8.    A principle is … to be the extent that the accounting information is not influenced by the personal bias of those who furnish the information ?

1. Going concern concept                                    2. Money measurement concept

3. Cost concept                                                     4. Objective concept

9.    According to the … concept, revenue is considered as being raised on the date at which it is realized ?

1. Assumption                                                       2. Basic condition

3. Both 1 & 2                                                         4. None of these

10.  Contingent liability is shown in the balance sheet because of :

1. convention of consistency                                2. Convention of materiality

3. Convention of disclosure                                  4. None of these

11.  Revenue is considered as being earned when ?

1. Cash is received                                               2. Production is done

3. Sale is effected                                                 4. None of the above

12.  Accounting does not record non-financial transaction because of :

1. Measurement concept                                      2. Accrual concept

3. Entity concept                                                   4. None of these

13.  The system of recording transactions based on dual concept is called ?

1. Double accounting system                               2. Double entry system

3. Single entry system                                         4. None of these

14.  A contractor usually takes up revenue and earnings on his project on the following basis ?

1. Cash basis                                                        2. Sales basis

3. Production basis                                               4. None of these

15.  When applied to the balance sheet, the convention of conservatism result in ?

1.    Understatement of assets

2.    Understatement of liabilities and provisions

3.    Overstatement of capital

4.    None of these

16.  The accounting equation is based on :

1. Going concern concept                                    2. Dual aspect concept

3. Business entity concept                                    4. None of these

17.  Market value of investments is shown as a footnote according to :

1. Going concern concept                                    2. Dual aspect concept

3. Business entity concept                                    4. None of these

18.  Market value of investments is shown as a footnote according to :

1. Convention of disclosure                                  2. Convention of consistency

3. convention of conservatism                             4. None of these

19.  Which is the correct ?

1. Capital = Assets + Liabilities                             2. Capital = Net Assets

3. Liabilities = Capital – Assets                             4. None of these

20.  The profit made by a  concern during the past one year would be, when the capital increased by Rs.40,000 and drawings amounted to Rs.10,000 :

1. Rs.50,000                                                          2. Rs.30,000

3. Rs.40,000                                                          4. None of these

21.  In each of the following cases indicate the alternative which you consider to be correct; the liabilities of firm are Rs.3,000. The capital of the proprietor is Rs.7,000 the total assets are :

1. Rs.7,000                        2. Rs.10,000                3. Rs.4,000                  4. Rs.4,500

22.  The assets of business on 31^st March 1996 are worth Rs.50,000 and its capital is Rs.35,000. Its liabilities on that date shall be Rs. :

1. 85,000                           2. 15,000                     3. 35,000                     4. 80,000

23.  Cash book is an example of :

1. General Journal                                                2. Specific Journal

3. It is not a Journal                                               4. None of these

24.  Commission received in advance is of the nature of :

1. Real account                                                     2. Nominal account

3. Personal account                                              4. None of these

25.  Rebate on Bills discounted account is of the nature of :

1. Personal Account                                             2. Nominal Account

3. Real account                                                     4. None of these

26.  Patent rights account is of the nature of :

1. Nominal Account                                              2. Personal Account

3. Real account                                                     4. None of these

ANSWERS

1.4     2.4     3.3     4.4     5.4     6.3     7.4     8.4     9.2     10.3     11.3     12.1    13.2    14.4    

15.1     16.2     17.3     18.1     19.3     20.1     21.2     22.2     23.2     24.3    25.1     26.3