Test Papers on Accountancy

1. Income Tax paid by a sole trader is reflected in his financial statement:
A. As an addition to his Capital
B. On the credit side of his profit and loss account
C. As an item of assets in the Balance sheet
D. As a deduction from Capital

2. If closing stock appears in trial Balance, it will be appearing in:
A. Trading Account
B. Balance Sheet
C. Trading Account & Balance Sheet
D. Profit & Loss Account.

3. 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

4. Net Profit, before adjustment is Rs. 180,000/-. Adjustments are outstanding salary- Rs. 10,000/-, Prepaid Insurance— Rs 13,000/-. The profit after adjustments will be:
A. Rs. 1,83,000/-
B. Rs. 1,77,000/-
C. Rs. 2,03,000/-
D. Rs. 1,87,000/-

5. During transit a machine was damaged. The cost of repairing incurred Rs 30,000/-. This expense is treated as:
A. Revenue Expense
B. Capitalised-Revenue Expense
C. Capital Expense
D. Deferred Revenue Expense.

6. The Schedule of balances prepared from Ledger accounts, is known as:
A. Statement of Affairs
B. Trial Balance
C. Balance Sheet
D. Statement of accounts.

7. Find out the gross profit if the rate of Gross profit is 25% on sales and the cost of goods sold is Rs.1,80,000/-:
A. Rs. 60,000/-
B. Rs. 36,000/-
C. Rs. 45,000/-
D. Rs. 30,000/-

8. Which of the following will not affect the agreement of Trial Balance?
A. Wrong balancing of an account
B. Wrong totalling of an amount
C. Omission of an account from the trial balance
D. Writing of an amount in the wrong account but on the correct side.

9. Balance of Petty Cash Book is:
A. Expense
B. Income
C. Liability
D. Asset

10. Final Accounts are prepared:
A. At the end of Calendar Year
B. At the end of Assessment year
C. At the end of Accounting year
D. On the completion of annual accounts

11. Given:
Cost of goods sold= Rs 150,000/-.
The closing stock= Rs 40,000,
Opening Stock=Rs 60,000/-.
The amount of purchases will be:
A. Rs 130,000/-
B. Rs 170,000/-
C. Rs 50,000/-
D. Rs 135,000/-

12. Final Account is prepared to find out:
A. Capital of the business
B. Correct value of assets
C. Profit and loss account and profitability
D. Profit or loss account and financial position.

13. How is cost of Goods sold calculated?
A. Opening stock + Purchases + Direct Expenses — Closing Stock.
B. Purchases – Direct expenses + Closing Stock +Opening Stock.
C. Sales — Gross loss.
D. Sales + Direct Expenses — Gross Profit.

14. Rs. 20,000 received from Pooja is credited in the account of Ninja. It is an error of
A. Principle
B. Omission
C. Commission
D. Compensating

15. Trial Balance does not include:
A. Opening Stock
B. Closing Stock
C. Capital
D. Proprietor’s drawing.

16. Omission of Paise and showing round figure in financial statement is based on:
A. Conservatism Concept
B. Consistency Concept
C. Materiality Concept
D. Money Measurement Concept

17. Income is measured on the basis of
A. Matching Concept
B. Consistency concept
C. Cost Concept
D. Dual aspect principle

18. The proprietor of a business is treated as a creditor of the business under
A. Accounting Period Principle
B. Business Entity Principle
C. Accounting cost principle
D. Going Concern Concept

19. Sundry Creditors account is under the classification of:
A. Natural person Account
B. Artificial Person account
C. Representative personal account
D. Nominal Account.

20. Raju has returned Goods worth Rs 5,000/- to Shyamo as the Goods are found defective, what kind of document will be prepared by Shyamo?
A. Invoice Bill
B. Debit Note
C. Credit Voucher
D. Credit Note

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21. Pick out a source Voucher from the following:
A. Debit Voucher
B. Credit Voucher
C. Transfer Voucher
D. Invoice

22. Goods worth Rs 7000/- given away as charity, would be credited to:
A. Sales Account
B. Purchase Account
C. Charity Account
D. Cash Account

23. Ram is a debtor for Rs. 10,000/-. He is insolvent and only 60 paise in a Re. is collected from him. The balance of Rs. 4000/- not collected should be entered to the:
A. Debit of Discount
B. Credit of Discount
C. Debit of Bad Debts
D. Credit of Bad Debts

24. Loss of Goods by five should be credited to:
A. Sales Account
B. Loss by Fire in Godown
C. Profit and Loss Account
D. Purchase Account

25. Rent of Proprietor house, paid from the account of cash of the business, will:
A. Reduce the profit
B. Increase the profit
C. Reduce the Capital of the business
D. Reduce cash and capital of the business.

26. On 31st March, 2018 the cash column of cash book shows Rs 8,000/-. After receiving from Shyam, giving a cheque of Rs 2,800/- to Sunil and making a payment of office rent Rs 1,000/-, the balance of cash book will be:
A. Rs. 7,000/-
B. Rs. 9,000/-
C. Rs. 7,200/-
D. Rs. 6,200/-

27. Which of the following will be recorded as contra entry?
A. Cash directly deposited in the bank by a customer
B. Payment made by debtors by Cheque
C. Notes and coins deposited in the bank
D. Cash sales and directly deposited to bank on the day.

28. A cheque deposited in the bank is dishonoured by the bank. It will be recorded in the cash book in:
A. Bank Column debit side
B. Bank Column Credit side
C. Cash column debit side
D. Cash Column Credit Side

29. Purchase book is used to record:
A. Purchase of Goods
B. Credit Purchase of Goods
C. Credit Purchases of Assets
D. All Credit purchases in the business.

30. Purchased goods from Manoj Rs. 20000/— at 20% T.D. Posting will be made at Manoj Account:
A. Debit side. Rs. 20,000/—
B. Credit Side Rs. 20,000/-
C. Debit Side Rs 16,000/-
D. Credit Side Rs 16,000/-

31. The Debit Notes issued are used to prepare:
A. Purchase return book
B. Sales return book
C. Purchase Day Book
D. Sales Day Book.

32. Goods taken away by the proprietor form the business for personal use, will be recorded in:
A. Purchase book
B. Sales book
C. Journal Proper
D. D. Closing Stock

33. Profit and loss account is more important than Balance Sheet, because:
A. It records all indirect expenses
B. It is very voluminous
C. It shows the profitability of the business
D. It records all adjustments.

34. 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. Excess of debits over credits in the cash book.

35. A bank reconciliation is prepared by
A. The Bank personnels
B. Customer of the bank
C. Creditors
D. Specific Auditors

36. Which of the following is not a part of Double Entry System?
A. Trial Balance
B. Journal
C. Cash book
D. Bank Reconciliation statements

37. Wages paid to Raja for erecting a machine, should be debited to:
A. Wages Account
B. Raja’s Account
C. Machine Account
D. Machine Repairing Account.

38. Purchased goods from Gopal Rs 3,600/- but was recorded in Gopal’s account as Rs 6,300/-. The rectifying entry will be
A. Credit Gopal Rs. 9,900
B. Debit Gopal Rs. 2,700
C. Credit Gopal Rs. 2,700
D. Debit Gopal Rs. 9,900

39. Error are:
A. Undetected mistakes
B. Intentional mistakes
C. Frauds
D. Unintentional mistakes.

40. Suspense Account is
A. Real Account
B. Nominal Account
C. Personal account
D. Any one of the accounts

41. Sale of an office type writer should be credited to
A. Sales account
B. Cash Account
C. Assets account
D. Type writer account

42. Which of the following is not recorded in the cash book?
A. Trade Discount
B. Bad Debt Recovered
C. Loan Received from bank
D. Advance Salary Paid

43. Journal Records the transactions of a firm in a:
A. Systematic manner
B. Numerical way
C. Chronological order
D. Summarized process.

44. According to dual aspect principle
A. Assets= liability-Capital
B. Capital=Assets +Liability
C. Liabilities=Assets +Capital
D. Capital=Assets-Liability

45. The Principle of conservatism takes into account:
A. All future profit and losses
B. All future profits and not losses
C. All future losses and not profits
D. Neither profits nor losses of the future

46. Goods means:
A. Commodity brought but not to be sold
B. Commodity used as an assets
C. Commodity bought for office decoration
D. Commodity bought and sold.

47. A businessman records his medical expenses in the firm’s income statement. Indicate the principle violated:
A. Cost Principle
B. Prudence Principle
C. Full Disclosure
D. Entity Concept

48. The form listing the balance and title of accounts in the ledger, on a given date is the:
A. Income Statement
B. Balance Sheet
C. Profit and loss Account
D. Trial Balance.

49. A ledger posted of goods sold for Rs 500/— instead of Rs 550/— Is called:
A. Error of omission
B. Error of Commission
C. Error of Principle
D. Compensating Error

50. Which of the following is not in the columns of the Trial Balance?
A. Ledger Accounts
B. Debit and Credit Accounts
C. Ledger Folio
D. Journal Folio