Online Test

Question # 1

Discount deducted from the catalogue or list price is called:

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Trade discount

Cash discount

Catalogue discount

Credit discount

Net profit plus expenses is equal to

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purchases

Cost of goods sold

Capital

Gross profit

Sales are equal to

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Cost of goods sold + Profit

Gross profit - cost of goods sold

Cost of goods sold - gross profit

None of these

Error of principle involves an incorrect allocation of expenditure or receipt between.

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Capital and revenue

Capital and capitalized

Revenue and deferred revenue

Revenue and revenue

Drawings are deducted from

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Sales

Income

Capital

Expenses

Allowance for doubtful debts normally has a

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Debit balance

Credit balance

Both debit & credit balance

None of these

Preliminary expenses incurred before the commencement of business

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revenue expenditure

capital expenditure

deferred revenue expenditure

capital loss

______ must be prepaid for testing ledger accounts, adjusting entries and financial statement

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Work sheet

Balance sheet

Bank statement

Trail balance

Petty cash book is a branch of

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Pass Book

Cash Book

Journal

Ledger

Which book is used to record all cash receipts and cash payments?

Choose an answer

Sale book

Purchase book

Cash book

Petty cash book

When cash is paid to creditors it will decrease

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cash

capital

debtor

cash & creditors

Which one of the following in used to simplify work, to be done at the end of period

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Balance sheet

Income sheet

Bank statement

Work sheet

Financial accounting is mainly confined to preparation of:

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Manufacturing statement

Financial statements

Production statement

Sale statement

The system of accounting in which accounting entries are made only when cash received or paid is known as

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Cash system

Accrual system

Mercantile system

Single system

Double entry means

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entry in two sets of books

entry at two dates

entry for two aspects of a transaction

recording twice in journal

Wrong allocation of capital and revenue items of expenses represents

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error of casting

error of principle

compensation error

error of commission

All the acceptances received from the debtors are recorded in

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Cash book

Bills payable book

Debtor's book

Bills receivable book

Which book is used to record all credit purchases?

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Purchases book

Purchases book return

Cash book

Debit note book

The transactions, the effect of which is not exhausted with in the current accounting year are called

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Revenue transaction

Capital transaction

Current transaction

Monetary transaction

In three column cash book, discount column is

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Totaled

Balanced

Carry Forward

Both a and b

Net purchases are equal to

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Sales - returns outwards

Purchases + returns inwards

Purchases - returns outwards

Purchases + returns outwards

Cash account is a:

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Personal account

Real account

Nominal account

Both real and personal account

In the preparation of the worksheet the amounts on the trail balance columns are taken directly from

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Journal

Ledger

Trail balance

Transaction

If there is any error in Bank account it will affect

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Trading and profit and loss account

Profit and loss account

Trading account

Balance sheet

It is the price of goods sold or services provided by a business to its customers

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Asset

Cost

Capital

Revenue

Which of the following discloses the financial position of the business:

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Trading account

Profit and loss account

Profit and loss appropriation account

Balance sheet

When a drawee honours his acceptance, he will credit

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Capital Account

Drawer Account

Bill Payable Account

Cash Account

Cheques issued to a creditor but not presented for payment are called

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Un Credited Cheques

Uncollected Cheques

Un Presented Cheques

Dishonoured Cheques

Accounts relating to persons of firms are called:

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Real accounts

Proprietary accounts

Personal accounts

Nominal accounts

A statement which is prepared to know the financial position of a business on a particular date, is called

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Balance sheet

Statement of condition

Position statement

All of above

paid to Nadeem cash Rs. 5000 and a cheque for Rs. 4800 in full settlement of his dued Rs. 10000 should be credited to

Choose an answer

Cash account

Bank account

Discount received account

All of these

Gross profit represents

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Opening stock + purchases

closing stock + direct expenses - sales

closing stock-purchases-direct expenses + sales

purchases - sales

If the error committed in the capital account, it will affect

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trading account

profit & loss account

trading and profit & loss account

balance sheet

All the direct expenses are charged to:

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Balance sheet

Profit and loss account

Trading account

None of these

Net sales - cost of goods sold - operating expenses = ?

Choose an answer

Net purchases

Cost of goods sold available for sale

Net operating income

Gross Profit

Capitalized expenditure are shown in

Choose an answer

Trading a/c

Profit or loss a/c

Income statement

Balance sheet

Any difference in trail balance, is transferred to

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Sales account

Nominal account

Purchases account

Suspense account

Office rent is a

Choose an answer

Financial Expense

Abnormal Loss

Management Expense

Maintenance Expense

Adjusting entries affect

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Balance sheet

Income statement

Work sheet

All of them

The periodical total of purchases book is posted to the

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Debit of purchases account

Credit of purchases account

Credit of cash account

Debit of sales account

A bill which is both drawn and payable within the geographical boundaries of a country

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Foreign Bill

Local Bill

Municipal Bill

Inland Bill

If amount for Rs. 554 recovered from Ali, previously written off as bad debts we should

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Debited to bad debts recovered account

Credited to Ali account

Debited to bad debts account

Credited to bad debts recovered account

Raw material destroyed in fire represents

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capital loss

revenue loss

normal loss

both b, c

The amount of assets, liabilities, capital and drawings are extended form adjusted trail balance to the

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Balance sheet columns

Income statement columns

Cash columns

Bank columns

When balance of suspense account has debit balance it will be shown in balance sheet on

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Liability side

Capital side

Asset side

Credit side

When an acceptor refuses to pay the amount of bill to the holder on its maturity date it is called

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Honoured Bill

Retired Bill

Dishonoured Bill

Endorsed Bill

A transaction has been journalized but posted wrongly in the ledger account, it is an:

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Error of positing

Error of principle

Error of omission

Error of commission

The Amount of salary paid to Sohail should be debited to

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Sohail's a/c

Cash Account

Salaries a/c

Both a & c

Debit Signifies

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Increase in Asset Account

Decrease in Liability Account

Decrease in Capital Account

All of the Above

The accounting system in which accounting entries are made on the basis of amount having become due for payment or receipt, is called

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Cash system

Accrual or mercantile system

Outstanding system

None of these

One way of avoiding errors in the permanent accounting records is to use a form which is called

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Bank statement

Trail balance

Balance sheet

Work sheet

Profit & Loss a/c is prepared to ascertain

Choose an answer

Gross Profit

Net Profit

Gross Loss

Real Profit

Wages paid of installing a machine should be debited to

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Wages a/c

cash a/c

Machinery a/c

None of these

The balance of petty cash book is a/an

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Asset

Liability

Expense

Income

The balance of the trading account is the transferred to:

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Profit and loss account

Balance sheet

Work sheet

Position statement

Credit purchases are recorded in

Choose an answer

Purchases book

Creditors book

Cash book

Purchases returns book

A trial balance can be constructed by

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Three Methods

Two Methods

Four Methods

Five Methods

When ban column of a cash book shows a debit balance it means:

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Overdraft as per bank

Unfavourable balance as per cash book

Favourable balance as per cash book

Favourable balance as per pass book

The favourable balance of bank statement is

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Credit Balance

Debit Balance

Zero Balance

Both b and c

A bill of exchange contains:

Choose an answer

An unconditional order

A promise

A request

A conditional order

The book in which all cash transactions are primarily recorded is called

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Cheque Book

Pass Book

Cash Book

Finance Book

From business point of view, interest on capital is considered as

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An income

An Expense

A Profit

A Liability

The excess of gross profit on sale over total operating expenses is called:

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Cost of goods sold

Gross profit

Net profit

None-operating income

The act of withdrawing a bill of exchange from circulation when it had been paid before the due date

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Renewal of a Bill

Discounting of a Bill

Endorsement of a Bill

Retiring of a Bill

Pass book is prepared by

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Debtor

Creditor

Banker

Customer

The effect of drawing on accounting equation is

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decrease in assets and decrease in liabilities

increase in both assets & liabilities

decrease in assets and increase in capital

none of these

A receipt is revenue in nature, if it relates to:

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Balance sheet

The receipt of accounting year

Small amount

Routine activity of the business

An operating statement is similar to a

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Balance sheet

bank reconciliation statement

Financial statement

Profit or loss statement

When bank column of a cash book shows a credit balance, it means:

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Cash balance

Bank balance

Under draft

Over draft

A table lost by fire should be debited to

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Table a/c

Furniture a/c

Loss by Fire a/c

Purchases a/c

Worksheet provides complete information for preparing

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Income statement

Position statement

Financial statement

Bank reconciliation statement

If the balance of suspense account is credit then it will be shown in balance sheet on

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Asset side

Asset and liability side

Asset and capital side

Capital and liability side

All the bills given to the creditors are recorded in

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Creditor's book

Bills payable book

Bills receivable book

Bank book

Goodwill, patent, copyright are classified as

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Current Assets

Fixed Assets

Tangible Assets

Wasting Assets

Depreciation of fixed assets used in the business is an example of

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capital expenditure

Revenue expenditure

Deferred expenditure

None of these

The first successful step of Double Entry System is

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Leger

Journal

Final Account

Trial Balance

The system of recording transaction based on dual concept is called

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Double account system

Double entry system

Single entry system

Management system

The act result of the business activities is shown by:

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Profit and loss account

Profit and loss appropriation account

Trading account

Balance sheet

Which one of the following is appeared in the balance sheet ?

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revenue expenditure

capital expenditure

deferred revenue

both b,c

An expenditure, which is temporarily increase the profit making capacity of the business is called

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Deferred expenditure

Capital expenditure

Revenue expenditure

Non-recurring expenditure

A document is sent to customer when he returns the goods is called

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Promissory note

Debit note

Currency note

Credit note

The person to whom bill is transferred will become

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Endorser

Creditor

Debtor

Endorsee

Our cheque to Ali & Bros, returned dishonored should be credited to

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Cheque account

Cash account

Bank account

Ali & Bros account

The accounts of expenses, incomes, losses and gains

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real accounts

valuation accounts

nominal accounts

personal accounts

The transaction for which non separate book is maintained are recorded in:

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Journal proper

Bills receivable book

Bills payable book

Cash book

The outflow of funds to meet the running expenses of a business

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Revenue loss

Revenue expenditure

capital expenditure

capital loss

A sale of Rs. 1000 to Farid, was credited to his account, it will affect

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Sales account

Farid account

Cash account

Both a & b

Rent account' is a kind of:

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Real account

Personal account

Nominal account

Capital account

The periodical total of purchases returns book is posted to

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Debit of returns outwards account

Credit of returns inwards account

Debit of returns inwards accounts

Credit of returns outwards account

In accounting all business transactions are recorded which have:

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Dual aspect

Single aspect

None of the above

Economic aspect

Which account is a summary of direct expenses and direct revenues

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Trading and profit or loss account

Profit or loss account

Balance sheet

Trading account

Journal shows all necessary information regarding.

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The document

A transaction

The accounting

Meeting

Net sales are equal to sales minus

Choose an answer

Returns inwards

Returns outwards

Cost of goods sold

carriage on sales

Adjusted ______ is used to prepare the income statement and balance sheet

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Trail balance

Ledger

Balance sheet

Bank statement

Which one of the following is appeared in the balance sheet

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Revenue expenditure

Capital expenditure

Deferred expenditure

Both b & c

The amount invested by the owner in the business to produce revenue is known as

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Income

Asset

Capital

Liability

The accrued income or outstanding income will appear in the balance sheet as

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An expense

A liability

An asset

Both a & b

In the preparation of worksheet the amounts in the trail balance are taken directly form the ______

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Ledger

Trail balance

Balance sheet

None of these

The rules of the debiting the receiving and crediting the giver is applicable to:

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Persona account

Real account

Nominal account

Expense account

Error due to wrong allocation as expenditure between capital and revenue is regarded as:

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Error of omission

Error of principle

Compensating errors

Error of Commission

Nominal account are related to:

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Assets and liabilities

Expenses, losses and incomes

Customers, creditors etc

Capital account

Cost incurred to generate revenue is called

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Revenue

Cost

Expense

Liability

When cash is withdrawn from the bank for the personal use of the owner, must be debited to

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Cash account

Bank account

Drawings account

Capital account

Retiring a bill under rebate means

Choose an answer

Payment of Bill Before Due Date

Payment of Bill After due date

Discounting of a Bill

Dishonouring of a Bill

The account of depreciation of building of Rs. 30,000 at 5% p.a. will be

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Rs. 20,00

Rs. 15,00

Rs. 25,00

Rs. 5,00

The concept of conservation will have the effect of:

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Understatement of assets

Under statement of liabilities

Overstatement of assets

None of the above

The recording of transaction chronologically in the book of accounts is called:

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Summarizing

Classifying

Recording

None of above

Gross profit is derived from

Choose an answer

Trading a/c

Profit & Loss a/c

Trial Balance

Balance Sheet

From business point of view, Interest on capital is considered as

Choose an answer

An income

An expense

A profit

A liability

A document given by the seller to the buyer for credit sale of goods or assets is called

Choose an answer

Cash memo

Invoice

Voucher

None of these

The debts, the recovery or realization of which is uncertain are known as

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Bad bets

Doubtful debts

Provision for doubtful debts

Loan

A revenue expenditure, the benefit of which is not confined to one accounting year is called

Choose an answer

Non-current expenditure

Revenue expenditure

Future expenditure

Deferred expenditure

The errors in which amount have occurred on the opposite sides of two or more accounts and have concealed themselves in the net result, are:

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Error of principle

Errors of omission

Errors of commission

Compensating error

Wages paid for the erection of machine debited to wages account is an example of

Choose an answer

Error of omission

Error of commission

Error of principle

None of these

Salary outstanding account relevant to:

Choose an answer

Representative personal account

Artificial person's account

Natural persons account

Nominal accounts

Cash paid to Naeem will affect

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cash & capital

cash & creditor

cash and debtors

cash & goods

______ is prepared to avoid errors in the permanent records of accounting

Choose an answer

Work sheet

Ledger

Bank statement

Balance sheet

The amount becomes due from the customers is called

Choose an answer

Allowance

Loan

Debts

Doubtful debts

Bank account is a:

Choose an answer

Personal account

Real account

Nominal account

None of these

Loss of good by fire should be credited to:

Choose an answer

Purchase account

Sales account

Loss by goods by fire account

Capital account

Narration is always written:

Choose an answer

Above each entry

Below each entry

Between of each entry

None of these

Trade expenses of Rs. 180 posted in the ledger as Rs. 810, it will be considered as

Choose an answer

Error of principle

Error of omission

Error of casting

Error of transposition

All those expenses which have not become due but paid in advance are called

Choose an answer

Accrued expenses

Outstanding expenses

Prepaid expenses

Payable expenses

Expired cost of fixed assets means

Choose an answer

Appreciation

Amortization

Depreciation

None of these

Capital contributed by the partners is a:

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Revenue receipt

Capital receipt

Current receipt

Deferred receipt

Which one of the following is not considered the permanent part of the accounting record?

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Journal

Trail balance

Ledger

Work sheet

Cost of goods sold is equal to

Choose an answer

sales - purchases

purchases + closing stock - returns outwards

Opening stock - closing stock + purchase + returns inwards

Opening stock + purchases - returns outwards - closing stock

Goods purchased from Robin have been posted to Rahim account, it is an:

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Error of omission

Error of casting

Error of posting

Error of commission

The profit which is earned during the ordinary course of business is regarded as:

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Capital profit

Revenue profit

Revenue loss

Long term profit

Goodwill, patent, copyright and trade mark are

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Wasting assets

Intangible assets

Fictitious assets

Liquid assets

The process of totaling the data at the end of the period is called

Choose an answer

Posting

Casting

Compensating

Recording

When two or more than two error occurred on the opposite side of the account and cancelled the affect of each are called

Choose an answer

Errors of omission

Compensating errors

Errors of commission

Errors of principle

Interest on drawings is

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An asset

A liability

An expense

A revenue

Profit or loss appropriation account is not prepared in the case of

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Partnership

Joint stock company

Sole tradership

Partnership at will

The capital profit should be transferred to:

Choose an answer

Profit and loss account

Trading account

Balance Sheet

Both Trading and profit and loss account and balance sheet

It is prepared to determine the net profit or net loss

Choose an answer

Trading account

Profit or loss account

Cash book

Balance sheet

A gradual decrease in the value of fixed assets is called

Choose an answer

Reduction

Revaluation

Deprecation

None of these

The revenue that has not become due, but received in cash in current year is known as

Choose an answer

Revenue received in advance

Accrued revenue

Unearned revenue

Both a & c

Expenditure, which helps to maintain the business efficiency is called

Choose an answer

Revenue expenditure

Deferred expenditure

Capital expenditure

Future expenditure

Cash account is concerned with:

Choose an answer

Real account

Personal account

Nominal account

Capital account

Transportation cost paid for the purchases of Machinery must be debited to

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Transportation cost account

Purchases account

Machinery account

Cash account

Purchased goods on credit and for cash will affect

Choose an answer

cash & goods

cash & creditors

cash creditors & owner's equity

cash goods and creditors

A receipt is revenue receipt because

Choose an answer

the amount is small

it relates to routine activity of business

it is received in the accounting year

both b, c

The cash book is a

Choose an answer

Subsidiary Journal

Ledger Account

Subsidiary Journal and Ledger

Trial Balance

A bill of exchange is drawn by

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Debtor

Creditor

Endorser

Endorsee

A cash account always shows

Choose an answer

Debit Balance

Credit Balance

Both a and b

Nil Balance

The document evidencing cash receipts and payments and forming the basis for making entries in the cash book is called:

Choose an answer

Receipt voucher

Payment voucher

Cash voucher

Cash memo

A document evidencing cash receipts and payments and forming the basis for making entries in the cash book is called

Choose an answer

Receipt voucher

Cash voucher

payment voucher

Cash memo

Net Sales represent

Choose an answer

Sales - return outwards

Sales - return inwards

Sales - return to supplier

both b and c

An error completely omitted to be entered in the journal

Choose an answer

partial error

error of posting

error of casting

complete error

Interest on renewal of a bill is the expense of

Choose an answer

Drawer

Drawee

Holder

Endorsee

Position statement is similar to a

Choose an answer

Trial balance

Balance sheet

Financial statement

Bank reconciliation statement

Trading account is the account which is prepared to determine the:

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Only gross profit of the business

Only gross loss of the business

Gross pro0fit or the gross loss of the business

None of the above

Debts which are repayable in the course of less than one year bur more than one month are called

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Quick liabilities

Deferred liabilities

Contingent liabilities

Liquid liabilities

Real accounts are related to:

Choose an answer

Assets

Expenses, losses and incomes

Customers, creditors

Incomes

Events which are related with money are called:

Choose an answer

Monetary events

Non - monetary events

None-social events

Political events

The expenditures which reduce revenue (profit) of the business are:

Choose an answer

Revenue expenditures

Capital expenditure

Fixed expenditures

Future expenditures

Bad debts recovered should be credited to

Choose an answer

Balance Sheet

Trading a/c

Profit & Loss a/c

None of these

Bank reconciliation statement is prepared by

Choose an answer

Banker

Customers Accountant

Auditor

Manager

Unearned income are known as:

Choose an answer

Incomes

Expenses

Liabilities

Assets

Any activity undertaken for the purpose of earning profit is called:

Choose an answer

Performance

Dealing

Business

Duties

.If the error committed in the capital account, it will affect

Choose an answer

Trading account

Profit and loss account

Trading and profit and loss account

Balance sheet

If a transaction has been completely omitted from the Journal it will be considered

Choose an answer

Error of commission

Error of principle

Error of omission

None of these

Which column is prepared in single column cash book?

Choose an answer

Bank Column

Cash Column

Discount Column

All of the Above

Net Profit is transferred to

Choose an answer

Trading Account

Balance Sheet

Capital a/c

Trial Balance

Credit Balance of pass book must be equal to debit balance of

Choose an answer

Cash Book

Bank Ledger

Clients other Account

None of these

Provision for the doubtful debts is debited to

Choose an answer

Debtors a/c

Provision for bad debts a/c

Profit or loss a/c

Bad debts recovered a/c

Patent is an example of

Choose an answer

Assets

Liabilities

Income

Expense

A Journal is generally kept on:

Choose an answer

A columnar basis

A row basis

A single line basis

Vertical basis

Accommodation bills are drawn accepted and endorsed

Choose an answer

Without any Consideration

for some Consideration

for Quarter Consideration

none of the above

Retiring a bill under rebate means:

Choose an answer

Making payment for the bill before the due date

Making payment for the bill after the due date

Dishonouring bill

None of the above

A book which is used to record small expenses is called

Choose an answer

Expenses book

Cash book

Petty cash book

Purchases book

If a liability is recorded as income, it will be considered as

Choose an answer

Error of commission

Error of omission

Error of Principle

None of these

Interest due but not received is an

Choose an answer

Outstanding expense

Accrued income

Prepaid expense

Unearned income

Error which affects profit and loss account relates to

Choose an answer

Nominal account

Property account

Personal account

None of these

The expenses which are incurred for the generation of revenues from the sales of goods are called

Choose an answer

Non-operating expenses

Selling expenses

Operation expenses

Administrative expenses

If any income omitted to be recorded it will

Choose an answer

Overstate the profit

Understate the profit

Both a & b

having no effect on profit

Any difference in trial balance is transferred to

Choose an answer

sales account

nominal account

purchases account

suspense account

Interest paid on loan is

Choose an answer

Abnormal Loss

Financial Expenses

Management Expenses

Maintenance Expenses

The owner of the business is known as:

Choose an answer

Sale man

Agent

Proprietor

Employee

All the time of endorsement of a bill the drawer credits:

Choose an answer

The drawee account

The endorser's personal account

Bill receivable account

Endorser's account

The cash book is a book of

Choose an answer

Compound entry

Original entry

Final entry

Simple entry

The book which is used to record all goods returned to us by our customers is called

Choose an answer

Returns outwards book

Returns inwards book

Sales book

Cash book

Which one of the following is a direct expense?

Choose an answer

Packing expense

Advertisement expense

Manufacturing expense

Traveling expense

If sales are Rs. 12000 Gross profit is 10% of sales and net profit is 5% of sales then the expenses will be

Choose an answer

1200

600

1800

2400

Goods returned by customers are

Choose an answer

purchases

purchases returns

sales returns

sales

Contain all residual account

Choose an answer

Debtors Ledger

Creditors Ledger

General Ledger

Cash Ledger

Heavy expenditure on advertisement for making a new product is a

Choose an answer

Revenue expenditure

Deferred expenditure

Capital loss

Non-recurring expenditure

Octori duty paid on machinery, is an example of

Choose an answer

Revenue expenditure

Recurring expenditure

Capital expenditure

Both a & b

Income received in advance during the year is

Choose an answer

Prepaid Expenses

Accrued Income

Advance Expenses

Advance Income

کسی شے کے مسلسل اور لگاتار استعمال سے مختتم افادہ میں کمی آتی جاتی ہے بشرطیکہ دیگر امور بدستور ہیں اس قانون کو کہتے ہیں

Choose an answer

قانون تقلیل افادہ مختتم

قانون مساوی افادہ مختتم

قانون طلب

قانون تقلیل حاصل

Errors, which do not affect on profit calculation, will have an effect only on

Choose an answer

Trail balance

Balance sheet

Profit or loss account

Trading account

The debts, which are irrecoverable from the debtors, are called

Choose an answer

Debts

Doubtful debts

Bad debts

Good debts

The Principle book of accounts is

Choose an answer

Journal

Ledger

Trial Balance

Balance Sheet

A sheet which minimizes the chances of errors to the maximum possible extent is called

Choose an answer

Balance sheet

Work sheet

Paper sheet

Income statement

Financial statement is prepared from the amount given in

Choose an answer

Trail balance columns

Adjustments columns

Cash columns

Adjusted trail balance columns

An expenditure, which is non-recurring and irregular is called

Choose an answer

Capital expenditure

Revenue expenditure

Short-term expenditure

Current expenditure

All those expenses which have become due but not paid are called

Choose an answer

Accrued revenue

Prapaid revenue

Outstanding expenses

Advance expenses

The body of worksheet contains

Choose an answer

Two pairs of money column

Three pairs of money column

Four pairs of money column

Five pairs of money column

An expenditure, incurred to improve the position of the business is known as

Choose an answer

Deferred expenditure

Revenue expenditure

Capital expenditure

Recurring expenditure

Subsidiary books are called books of

Choose an answer

Original entry

Secondary entry

Final entry

Basic entry

Excise duty is a

Choose an answer

Direct revenue

Indirect revenue

Direct expense

Indirect expense

An expenditure incurred in increasing the efficiency of a fixed asset is called:

Choose an answer

Revenue expenditure

Capital expenditure

Current expenditure

None of these

Bad debts are

Choose an answer

deferred expenditure

revenue expenditure

capital expenditure

none of these

Which one of the following is a direct expense?

Choose an answer

Custom duty

Carriage

Wages

All of above

A basis of business languages

Choose an answer

accounting

bookkeeping

transaction

cost accounting

A bill from the point of view of a creditor is called a:

Choose an answer

Bill payable

Bill receivable

Bil acceptable

Bill rejectable

Income tax paid is a

Choose an answer

Business Expense

Business Revenue

Business Liability

Personal Expense

When a Bill is dishonoured, the holder of the bill goes to an official called

Choose an answer

Inspector

Notary Public

Drawer

Manager

Errors of affect one account can be

Choose an answer

Errors of principle

Errors of posting

Errors of omission

None of these

Bill receivable book represents

Choose an answer

Ledger

Journal

Trail balance

All of above

The debts, the recovery of which is uncertain are called

Choose an answer

Unbelievable debts

unrealized debts

doubtful debts

both b and c

All those expenses which are incurred to convert raw-materials into finished goods are called:

Choose an answer

Direct expenses

Indirect expenses

Administrative expenses

Sales expenses

A Ledger is a book in which

Choose an answer

Only Personal & Cash Accounts are Opened

Only Real Accounts are Opened

Only Nominal Accounts are Opened

All Real, Nominal and Personal Accounts are Opened

______ simplifies work to be done at the end of the period

Choose an answer

Work sheet

Ledger

Trail balance

Balance sheet

In double entry system of bookkeeping every business transaction affects:

Choose an answer

Debit or credit side of the same account

Two accounts

The same side of the same account

None of the above

Bad debts are business

Choose an answer

Expenses

Liabilities

Assets

Revenue

How many columns are drawn on one side of three column cash book ?

Choose an answer

Five Columns

Six Columns

Seven Columns

Eight Columns

Ahmad's account is an example of

Choose an answer

real account

personal A/c

nominal account

none of these

Unfavorable balances mean

Choose an answer

Credit balance in the pass book

Credit balance in the cash book

Debit balance in bank statement

Both b & c

An expenditure, which increases the utility or productive capacity of an asset is treated as

Choose an answer

Revenue expenditure

Capital expenditure

Deferred expenditure

None of these

A many buy Rs. 40,000 worth good and sells them for Rs. 50,000. His gross profit is:

Choose an answer

Rs.10,000

Rs.20,000

Rs,30,000

Rs. 40,000

Transaction are recorded data wise, so journal is also called:

Choose an answer

Entry book

Transaction book

Chronological book

Voucher

According to accounting equation, capital is equal to

Choose an answer

assets + liabilities

expenses-incomes

liabilities - assets

assets - liabilities

The revenue profit should be transferred to:

Choose an answer

Balance sheet

Trading account

Profit and loss account

None of these

When is a drawee is declared insolvent which account is to be debited in the books of drawer

Choose an answer

Deficiency a/c

Bad Debts a/c

Solvency a/c

None of these

Suspense means

Choose an answer

certainty

uncertainty

surly

none of these

Preliminary expenses paid in the formation of a company is a

Choose an answer

Capital expenditure

Deferred expenditure

Revenue expenditure

Capital loss

Net profit is always

Choose an answer

Equal to gross profit

more than gross profit

Less than gross profit

None of these

Book used to record petty expenses and receipts

Choose an answer

Single Column Cash Book

Petty Cash Book

Double Column Cash Book

Treble Column Cash Book

Errors is casting of subsidiary books are called as

Choose an answer

Error of omission

Compensating error

Error of posting

Clerical errors

Bad debts are

Choose an answer

Deferred expenditure

Revenue expenditure

Capital expenditure

None of these

Gross profit equals to

Choose an answer

Net profit minus expenses

Sales minus closing stock

Purchases minus closing stock

Sales minus cost of goods sold

A statement which is used to reconcile the bank balance as per cash book with the balance as per pass book is called

Choose an answer

Bank statement

Income statement

Bank reconciliation statement

Financial statements

Worksheet contains ______ pairs of money columns

Choose an answer

Five

Four

Three

Two

Ledger Records Transaction in a/an

Choose an answer

Chronological Order

Daily order

Arithmetical Order

Analytical Order

A prepaid expense is

Choose an answer

An asset

A liability

An expense

An income

The process of totaling the data at the end of the period is called

Choose an answer

posting

casting

compensating

recording

Which of the following discloses the financial position of the business

Choose an answer

Trading account

Profit or loss account

Profit or loss appropriation account

Balance sheet

The statement which contains the explanation of different in cash book and bank statement is known as:

Choose an answer

Bank statement

Cash statement

Balance statement

Bank reconciliation statement

The balance of the 'Caha Column' in cash book is always:

Choose an answer

Debit balance

Credit balance

Both debit and credit balance

None of the above

Contra Refers to

Choose an answer

Same Side

Parallel Side

Opposite Side

None of these

Disagreement in balances may arise owing to mistake or mistakes in the:

Choose an answer

Cash book only

Bank statement

Cash book or bank statement

Bank column of the cash book only

Subsidiary books are called the book of:

Choose an answer

Original entry

Secondary entry

Temporary entry

Basic entry

An entry which is recorded on the both sides of cash book is called

Choose an answer

Simple entry

Compound entry

Combined entry

Contra entry

Journal is prepared in

Choose an answer

Columnar form

Vertical form

Horizontal form

Row form

A transaction is recorded on the same days as its takes place, so journal is also called:

Choose an answer

A day book

A history book

An entry book

Ledger book

Expenditure is a capital expenditure because

Choose an answer

The amount involved is heavy

It is the personal expenditure of the owner out of his capital

It is intended to benefit the future period

It is a recurring expenditure

Stock is trade is a

Choose an answer

Current asset

Non-current asset

Quick asset

Intangible asset

The book in which all cash transaction are primarily recorded is called

Choose an answer

Pass book

Cheque book

Finance book

Cash book

An expenditure, which is incurred to increase to profit earning capacity of a business concern, is called

Choose an answer

Deferred expenditure

Current expenditure

Capital expenditure

Recurring expenditure

Receipts, which are non-recurring by nature, are called

Choose an answer

revenue receipts

current receipts

capital receipts

capital profit

The person to whom a bill is addressed is the:

Choose an answer

Debtor

Creditor

Holder

Agent

Wages paid for the construction of building is an example of

Choose an answer

Revenue expenditure

Capital expenditure

Recurring expenditure

Short-term expenditure

The credit purchases were wrongly recorded in sales book, the rectification of entry

Choose an answer

Increase the net profit by double amount

Decrease the net profit by double amount

Decrease the net profit

Increase the net profit

Bill receivable account is a:

Choose an answer

Nominal account

Personal account

Real account

Expenses account

How many categories of accounts are

Choose an answer

two

three

four

five

Accounting principles can be classified in

Choose an answer

three types

two types

five types

six types

Ahmed's cheque endorse to Akbar should be debited to

Choose an answer

Cash account

Cheque account

Akbar's account

Ahmed account

Bank reconciliation statement is prepared by

Choose an answer

Banker

Customer's accountant

Auditors

Manager

Left hand side of an account is called

Choose an answer

Debit Side

Credit Side

Both a & b

None of these

Which account will be created in the presence of suspense account, if sales book is undercast by Rs. 500

Choose an answer

suspense A/c

sales A/c

cash A/c

none of above

Written below each entry is the

Choose an answer

Transaction

Voucher no

Narration

Date

Net profit is equal to

Choose an answer

Gross profit - expenses

Sales - Cost of goods sold

Sales - expenses

Capital - expenses

Goods withdrawn by the proprietor for personal use should be credited to

Choose an answer

Purchase a/c

Drawings a/c

Expenses a/c

Revenue a/c

Which of the following normally has a credit balance

Choose an answer

Machinery a/c

Purchases a/c

Stock a/c

Sales a/c

Which cash is paid or received in an exchange the transaction is called:

Choose an answer

Sale transaction

Cash transaction

Credit transaction

None of the above

The money can be deposited into bank by means of

Choose an answer

Cash book

Cheque book

Pay-in-slip book

Pass book

Expenses paid by a business decrease

Choose an answer

cash

capital

cash & capital

none of these

The accounts of assets and properties

Choose an answer

nominal accounts

real accounts

personal accounts

valuation accounts

When a bill is discharged the acceptor debits:

Choose an answer

Creditors account

Cash account

Bill payable account

Bill receivable account

An expenditure, which is completely exhausted with in the current accounting period is known as

Choose an answer

Deferred expenditure

Revenue expenditure

Future expenditure

Non-recurring expenditure

A dealing between two persons is called a

Choose an answer

business

transaction

purchases

sales

Accounting records of a business enterprise are required by

Choose an answer

management of the business

outsiders

all of the above

none of the above

Wages paid for installing a machine should be debited to

Choose an answer

Wages a/c

Cash a/c

Machinery a/c

none of these

A double column cash book is used to record

Choose an answer

Cash transactions only

Cash and bank transaction

Cash, bank and discount transaction

None of these

At the time of drawing a bill the drawer credits:

Choose an answer

Debtors account

Creditors account

bill receivable account

Suppliers account

An expenditure which is incurred again and again is a:

Choose an answer

Capital expenditure

Future expenditure

Deferred expenditure

Revenue expenditure

If any expense omitted to be recorded it will

Choose an answer

Overstate the profit

Understate the profit

Both a & b

No effect on profit

Transaction, having short-term effects are known as

Choose an answer

Revenue transaction

Capital transaction

Non-monetary transaction

Paper transaction

The margin that is available to cover the other expenses for a period and to yield net income is known as

Choose an answer

Net profit

Gross profit

Net sales

Cost of goods sold

Premium on issue of shares of a company represents

Choose an answer

capital loss

capital profit

capital payment

none of these

In form journal, the first column represents:

Choose an answer

Ledger Folio

Data

Amount

Debit

The time after which the bill is to be paid

Choose an answer

Grace Days

Tenor

Due Date

Extra Days

The creditor of the business are called:

Choose an answer

Assets

Liabilities

Capital

Income

When boan statement shown a debit total balance it means:

Choose an answer

Overdraft as per cash book

Unfavourable balance as per cash book

Favourable balance as per cash book

Overdraft as per bank statement

Expenses related to sale of goods are shown in

Choose an answer

Trading account

Profit or loss account

Balance sheet

Sales account

Expenditure is revenue expenditure because

Choose an answer

It is intended to benefit the current period

The amount involved is small

It is deducted from the gross sale proceeds

None of these

Bank for collection is a

Choose an answer

Permanent Account

Fixed Account

Current Account

Temporary Account

From the business point of view, interest on drawings is

Choose an answer

An asset

An expense

A liability

A revenue

Errors which affect one account can be

Choose an answer

errors of principle

errors of posting

errors of omission

none of these

All expenses connected with the office and its conduct are called

Choose an answer

Selling expenses

Marketing expenses

Service expenses

Administrative expenses

Sales returns book periodical total is posted to

Choose an answer

Debit of returns inwards account

Credit of returns inwards account

Debit of returns outwards account

Credit of returns outwards account

It is prepaid to determine the gross profit or gross loss

Choose an answer

Trading account

Profit or loss account

Balance sheet

None of these

The book which is used to record all goods returned by us to our supplier is called

Choose an answer

Returns inwards book

Purchases book

Return outwards book

Sales book

A bill of exchange is a / an

Choose an answer

Promise

Unconditional Order

Request

Conditional Order

Income tax paid is a

Choose an answer

Business expense

Revenue for business

Liability of business

Personal expense

Errors of omission affects

Choose an answer

One account

Two account

Three account

None of these

Assets come into existence upon the happening of a certain event, are called:

Choose an answer

Fixed assets

Fictitious assets

Floating assets

Contingent assets

The Legal tenor of a bill is

Choose an answer

Sixty Days

One Month

Eighty Days

Ninety Days

Outstanding expense given in adjustment is called

Choose an answer

An asset

A gain

An expense

A liability

Receipts which are non-recurring by nature:

Choose an answer

Capital receipts

Revenue receipts

Short term receipts

Capital profit

The most exhaustive cash book is

Choose an answer

Petty Cash Book

Single Column Cash Book

Double Column Cash Book

Treble Column Cash Book

Bookkeeping provides the

Choose an answer

primary information

secondary information

final information

insufficient information

The money with which business is started is known as:

Choose an answer

Capital

Creditor

Income

Debtor

It is used to record cash, bank and discount transactions on debit and credit side

Choose an answer

Single column cash book

Petty cash book

Double column cash book

Treble column cash book

Capitalized expenditures are shown in

Choose an answer

trading A/c

profit & loss A/c

income statement

balance sheet

Error of carry forward will affect

Choose an answer

Personal accounts

Nominal accounts

Impersonal accounts

None of these

When a drawer discounts a bill, he debits

Choose an answer

Bank Account

Interest Account

Drawee Account

Bill Receivable Account

Allowance for discount on account receivable is calculated on the amount of account receivable

Choose an answer

Before deducting the allowance for doubtful debts

Left after deducting the allowance for doubtful debts

Before deducting the actual bad debts

None of these

Acceptance to Mr. A was posted to the debit of B's account. The rectification of the entry will.

Choose an answer

Increase the net profit

Decrease the net profit

Have double effect on net profit

Have no effect on net profit

When cheque received, and deposited into bank, bank account must be

Choose an answer

Credited

Debited

Both debited & credited

None of these

When saleable goods are bought in a business are called:

Choose an answer

Sales

Purchase

Assets

Goods

All cash purchases and cash sales are recorded in:

Choose an answer

Sales book

Purchases book

Both a & b

Cash book

Error of principle arises when

Choose an answer

Any transaction is incorrectly recorded, either wholly or partially

Any transaction is left wholly or partially

Any transaction is affects one account

Any transaction is recorded in fundamentally incorrect manner

Modern system of bookkeeping is

Choose an answer

single entry system

double entry system

modern system

none of these

Assets which have no physical existence are called

Choose an answer

Tangible assets

Fictitious assets

Liquid assets

Intangible assets

A cash account always shows

Choose an answer

Debit balance

Credit balance

Both debit and credit balance

Nil balance

The book use to record all credit purchases is called:

Choose an answer

Purchases book

Purchase return book

Cash book

Creditor book

Cash account is a

Choose an answer

Personal account

Nominal account

Real account

Both personal and real account

Bad debts recovered from debtors should be credited to

Choose an answer

Debtors a/c

Bad debts a/c

Bad debts recovered a/c

Cash a/c

If sales return for Rs. 3,000 were incorrectly included in sales book, gross profit will be

Choose an answer

overstated by Rs. 3,000

understated by Rs. 6,000

understated by Rs. 3,000

overstated by Rs. 6,000

All cash purchases and cash sales are recorded in

Choose an answer

Cash book

Purchases book

Sales book

Purchases and sales book

The gross amount of goods sold or services performed during an accounting period is known as

Choose an answer

Purchase

Sale

Gross profit

Net profit

The bad debts which are showed in the trial balance are called

Choose an answer

new bad debts

old bad debts

further bad debts

additional bad debts

Record of business transaction in the journal is called

Choose an answer

Detail

Summary

Narration

Entry

Assets which have no market value are called

Choose an answer

Wasting assets

Fictitious assets

Intangible assets

Tangible assets

If goods purchased from Rahim for Rs. 499, credited to Rehman's account for Rs. 499. this is an

Choose an answer

Error of commission

Error of principle

Compensating error

Error of principle

Book-keeping is mainly concerned with:

Choose an answer

Recording of business transactions

Recording classifying and summarizing the recorded data

Interpreting the recorded data

None of the above

A bill of exchange is drawn by:

Choose an answer

A debtor

A creditor

A holder

Endorsee

Journal means

Choose an answer

Weekly

Monthly

Yearly

Daily

The price of goods sold or services rendered to the customers is called

Choose an answer

Sale

Profit

Expense

Revenue

If the total of the credit side of an account exceeds that of debit side of the same account, it is called

Choose an answer

Credit Balance

Debit Balance

Balancing

Zero Balance

When a bill is transferred by the drawer to his creditor, for settlement of his debts, it is called

Choose an answer

Retirement of Bill

Endorsement of a Bill

Discounting of a Bill

Settlement of a Bill

The ______ is not a part of the permanent accounting record

Choose an answer

worksheet

Journal

Ledger

Trail balance

Interest on drawing is debited to

Choose an answer

Capital

Drawings

Sundry Creditors

Outstanding expense

If the gross profit is Rs. 5000 and the net profit is 35% of the gross profit then the expenses must be

Choose an answer

3250

1250

3750

1750

Goods sold to Ali for Rs. 50,000 recorded in purchases day book will affect

Choose an answer

purchases A/c

sales account

purchases, sales & Ali account

purchases & sales account

When cash is received from debtor or customer, generally a receipt is issued to the debtor which is called

Choose an answer

Payment voucher

Receipt voucher

Cash voucher

None of these

Deprecation is

Choose an answer

A Liability

A loss

An expense

Both b & c

A balance sheet is a

Choose an answer

Statement of income and expenditure

Statement of debtors and creditors

Financial statement of a business on a particular date

Statement of profit earned by a busniess

Some expenses are incurred at the time of the sate of an asset. The Amount will be debited to:

Choose an answer

Assets account

Expenses account

Cash account

Purchases account

Usually every ______ entry affect both income statement and balance sheet

Choose an answer

Adjusting

Work sheet

Balance sheet

Ledger

The amount by which the revenue for a particular period of time exceed from expenses incurred to generate them is called

Choose an answer

Gross income

Net income

Revenue

Expenses

For every debit, there is a credit

Choose an answer

going concern concept

dual aspect concept

matching concept

cost concept

A statement which i prepared to ascertain the net income or net loss for a specific accounting period is called

Choose an answer

Position statement

Statement of condition

Financial statement

Bank reconciliation statement

Work sheet is also used as a source to prepare ______

Choose an answer

Financial statement

Income statement

Position statement

Bank reconciliation statement

How many parties are involved in case of Discounting of a bill ?

Choose an answer

Two

Three

Four

None of these

Net loss is always

Choose an answer

Equal to gross loss

More than gross loss

Less than gross loss

None of these

A ______ is a large columnar sheet of paper

Choose an answer

Worksheet

Balance sheet

Journal

None of these

Net profit is always

Choose an answer

Equal to gross profit

More than gross profit

Less than gross profit

None of these

The payments side of the cash book is undercast by Rs. 200, when overdraft as per bank statement i s the starting points:

Choose an answer

Rs. 200 will be deducted

Rs. 200 will be added

Rs. 400 will be added

Rs. 400 will be deducted

The concession given by the supplier to the buyer on purchases of good is known as:

Choose an answer

Sales discount

Trade discount

Purchase discount

Discount received

It is used to record only cash receipts and payments

Choose an answer

Single column cash book

Double column cash book

Treble column cash book

Sales book

A bank reconciliation statement is prepared by:

Choose an answer

banker

Accountant of the business

Statutory auditors

Rigistar

Income statement is prepared to ascertain the net result of the business concern under

Choose an answer

British accounting system

American accounting system

Cash system of accounting

None of these

A bill of exchange is a method of payment on

Choose an answer

Cash Basis

Credit Basis

Reserve Basis

Accommodation Basis

Distinction between capital and revenue items is important for the preparation

Choose an answer

Balance sheet

Trading and profit or loss a/c

Bank reconciliation statement

Both a & b

In adjusting the cash balance one of the following is not taken into account:

Choose an answer

Mistakes in the cash book

Mistake in the bank statement

Interest and dividends credited in the bank statement

None of the abvove

All revenue expenditure are taken to

Choose an answer

Trading a/c

Trading & profit or Loss a/c

Profit or loss a/c

Balance sheet

Personal account are related to:

Choose an answer

Assets and liabilities

Expenses, losses

Customers, creditors etc.

Incomes

Carriage account is a/an

Choose an answer

asset account

revenue account

expenditure A/c

withdrawal account

A copy of the customer's account in the bank's ledger is called:

Choose an answer

Deposit statement

Balance statement

Bank statement

Customer

When money is paid to a creditor or supplier a receipt is obtained from him which is called

Choose an answer

Cash voucher

Cash payment

Receipt voucher

Payment voucher

.The cash book is a

Choose an answer

Subsidiary journal

Ledger account

Subsidiary journal and ledger

Trial balance

Both cash purchases as well as credit purchases are recorded in

Choose an answer

Cash book

Purchase book

Purchases account

None of these

Received a cheque from Bilal Rs. 1900 in ful settlement of his debt Rs. 2000 should be debited to

Choose an answer

Cash account

Discount allowed account

Bank account

Both a & b

An income which has earned but not received is called

Choose an answer

Unearned income

Accrued revenue

Revenue received in advance

None of these

Cash of sales is equal to

Choose an answer

Sales - purchases

Purchases - return + closing stock

Opening stock + Purchases (Net) - Closing stock

Sales + Opening stock - (Purchases + Closing stock)

All the transactions related to credit sales are recorded in

Choose an answer

Sales returns book

Sales book

Cash book

Credit note book

The inflow of assets in return for services performed or products delivered during a period is

Choose an answer

Asset

Revenue

Non current asset

None of these

Any expenditure incurred to increase the earning capacity of a business

Choose an answer

capital expenditure

capital loss

revenue loss

revenue expenditure

Unfavourable balance means

Choose an answer

Credit Balance in the Pass Book

Credit Balance in the Cash Book

Debit Balance in Bank Statement

Both b and c

Our cheque to Babar & Bros, returned dishonoured should be credited to

Choose an answer

Cheque Account

Cash Account

Bank Account

Babar & Bros A/c

Error of posting effects:

Choose an answer

One account

Two accounts

Three accounts

Four accounts

The favorable balance of cash book bank column is

Choose an answer

Credit balance

Debit balance

Both debit and credit balance

None of these

The const concept applied only to the assets and not to:

Choose an answer

Expenses

Liabilities

Incomes

None of these

Cost of redecorating a cinema hall is a

Choose an answer

Capital expenditure

Capital loss

Revenue expenditure

None of these

A schedule of balances of all accounts is called

Choose an answer

Journal

Ledger

Balance Sheet

Trial Balance

In case of a debt becoming bad, the amount should be credited to

Choose an answer

Debtor's a/c

Bad Debts a/c

Sales a/c

cash a/c

All the transactions recorded to credit sales are recorded in:

Choose an answer

Sale return book

Sales book

Cash book

Debtor's book

A credit sale was wrongly passed through purchases book, the rectification of the entry will:

Choose an answer

Increase the net profit by, double amount

Decrease the net profit

Decrease the net profit by double amount

Have no effect on the net profit

The excess of credit column over debit column in income statement is called

Choose an answer

Net loss

Net profit

Cash balance

Gross profit

The favorable balance of bank statement is

Choose an answer

Credit balance

Debit balance

Zero balance

All of these

In journalizing the page numbers of the ledgers are written in:

Choose an answer

The first column of journal

The second column of journal

The third column of journal

The fourth column of journal

A bill from the point of view of a debtor is called

Choose an answer

Bill Acceptable

Bill Receivable

Bill Payable

None of these

Any mistake in ledger can be easily detected with the help of:

Choose an answer

Journal

Balance sheet

Trial balance

Financial statement

When the goods are returned to the suppliers, an intimation is sent to them is called

Choose an answer

Currency note

Invoice

Debit note

Credit note

Bank Reconciliation represents

Choose an answer

A Journal

A Ledger

A Statement

both a and c

The valuation of closing stock is at

Choose an answer

Cost price

Market price

Cost or market price whichever is lower

Cost or market price whichever is higher

The process of recording business transaction in the journal is called

Choose an answer

Posting

Journalizing

Classifying

Entry

An expenditure incurred to the increases the profit earning of the concern is a:

Choose an answer

Revenue expenditure

Current expenditure

Capital receipt

Capital expenditure

Payment of Rs. 50 to Raheel as wages for repairing machine should be debited to

Choose an answer

Machinery a/c

Repair a/c

Wages a/c

Raheel a/c

Assets having some market value

Choose an answer

Fictitious Assets

Real Assets

Unreal Assets

None of these

An Entry which is recorded on the both sides of cash book is called

Choose an answer

Simple Entry

Compound Entry

Combined Entry

Contra Entry

Net sales equal to

Choose an answer

Sales - Returns outwards

Sales + Returns inwards

Sales - Returns inwards

Purchases - Returns inwards

When goods are dispatched by the consignor to the consignee, it will be from consignor's view point

Choose an answer

Consignment inward

Consignment outward

Consignment in transit

All of these

Dissolution of firm due to the insolvency or due to the happening of an event, which makes it unlawful for partners to carry on partnership is called:

Choose an answer

Dissolution by agreement

Compulsory dissolution

Dissolution on the happening of certain contingencies

Dissolution by court

Under single entry system sometimes,

Choose an answer

Double aspects of a transaction are recorded

Single aspect of a transaction is recorded

No aspect of a transaction is recorded

All of the above

The official signature of the company,

Choose an answer

Partnership deed

Common seal

Common act

1984

In case of retirement of partner, full goodwill is credited to the accounts of

Choose an answer

Retiring partner

Remaining partners

All the partner

None of these

In the absence of an agreement, profit and loss are divided by partners in the ratio of

Choose an answer

Capital

Time devoted by each partner

Equally

Interest on capital

According to companies ordinance, single entry system cannot be adopted by,

Choose an answer

Sole proprietorship

Partnership

"a" and "b"

Joint stock companies

The valuation of goodwill arises on

Choose an answer

The admission of a new partner

The retirement or death of a partner

The dissolution or sale of firm's business

All of the above

Example of non-profit making organization

Choose an answer

Fan factory

Sugar industry

Hospital

Shoe factory

Non-profit making organization is also known as

Choose an answer

Non-profit seeking concern

Non-trading concern

Trading concern

"a" and "b"

Depreciation is charged on

Choose an answer

Fixed assets only

Current assets only

Both fixed assets and current assets

All of these

In case of retirement, goodwill raised with retiring partners share but written off to remaining partners in the:

Choose an answer

Gaining ratio

Sacrifice ratio

New ratio

Capital ratio

The act of sending goods by owner to his agent for sale is called

Choose an answer

Consignment

Sales

Purchases

Partnership

A person who is elected to run the club

Choose an answer

Treasurer

Secretary

Chairperson

President

In partnership other than banking business the members mus not exceed,

Choose an answer

20

15

10

5

In case of retirement, when goodwill is raised but written off is credited to:

Choose an answer

Retiring partners capital A/c

Remaining partners capital A/c

All partners capital A/c

Goodwill A/c

Dissolution of firm by the consent of all the partners is called:

Choose an answer

Dissolution by agreement

Dissolution by court

Dissolution on the happening of certain contingencies

Dissolution by notice

Consignee

Choose an answer

Bear expenses or losses in consignment

Share profit made on the sale of goods

Receives his commission from the consignor

All of the above

The remuneration of the consignee for selling the goods of the consignor is called

Choose an answer

Salary

Interest

Dividend

Commission

Which business has the perpetual existence,

Choose an answer

Sole proprietorship

Partnership

"a" and "b"

Joint stock company

In the absence of an agreement, interest on loan advanced by a partner to the firm is allowed at the rate of

Choose an answer

Six per cent

Five per cent

Twelve per cent

Seven percent

The essential element of partnership is

Choose an answer

There must be an agreement entered into by all the persons concerned

The agreement must be to share the profits of a business

The business must be carried on by all or any of them acting for all

All of the above

We cannot prepare the trial balance and precise balance sheet under,

Choose an answer

Single entry system

Double entry system

"a" and "b"

Barter system

All transactions relating to non-profit seeking concerns are recorded in the books of account strictly according to

Choose an answer

Single entry system

Double entry system

Treble entry system

"a" and "b"

Double entry system means

Choose an answer

The recording of same things twice

Double accounting

The two sides of every transaction are recorded

Entry at two dates

Suppose A, B & C are partners, sharing profits in the ratio of 1/2,1/3,1/6 respectively, What will be the new ratio if A retires in the absence of an agreement?

Choose an answer

1/3 : 1/6

1/3 : 1/2

1/3 : 1/5

1/2 : 1/6

In single entry system,

Choose an answer

Personal accounts are maintained

Real accounts are maintained

Nominal accounts are maintained

None of the above

The businessmen can increase the sale of their products

Choose an answer

By opening their own branches in different parts of the country and abroad

By adopting agents in their own country as well as abroad

By a huge head office building

"a" and "b"

If the incoming partner is to bring his share of goodwill is cash, and there exists any balance in goodwill account, then this goodwill account is to be written off among old partners in

Choose an answer

New profit sharing ratio

Old profit sharing ratio

Sacrificing ratio

Gaining ratio

The relationship between consignor and consignee is that of

Choose an answer

Principal and agent

Debtor and creditor

Buyer and seller

None of these

It is prepared by non-profit making organizations to determine surplus or deficit

Choose an answer

Trading account

Profit and loss account

Receipts and payments account

Income and expenditure account

The basic club record or book of original entry in non-profit making organization

Choose an answer

Purchase book

Sales book

Cash book

"a" and "b"

What will be the value of goodwill on two years purchase of the average profit of the last three years? The profit earned during the last three years are Rs. 10000, Rs.12000 and Rs.14000

Choose an answer

Rs.24000

Rs.20000

Rs.12000

Rs.36000

The consignee sells the goods on behalf of

Choose an answer

Drawer

Drawee

Consignor

Agent

It is an artificial person recognized by law,

Choose an answer

Joint stock company

Partnership

Sole proprietorship

"b" and "c"

The need for provision of depreciation is necessary to.

Choose an answer

Ascertainment of true profit or loss

Ascertainment of true cost of production

Replacement of assets

All of these

The relationship between persons who have agreed to share the profits of a business carried on by all or any one of them acting for all is called

Choose an answer

Sole proprietorship

Partnership

Joint stock company

Individual

A receipts and payments account is similar to

Choose an answer

An income and expenditure

A statement of affair

A cash or a bank account

A profit or loss account

The balance of memorandum revaluation account is transferred to capital accounts of all partners in:

Choose an answer

Capital ratio

Old profit sharing auto

New profit sharing ratio

Sacrifice ratio

How many kinds of companies are registered under company ordinance 1984?

Choose an answer

Two

Three

Four

Five

Partnership act is

Choose an answer

1932

1912

1962

1984

In the absence of an agreement to the contrary, the partners

Choose an answer

Are entitled for 6% interest on their capitals, only when there are profits

Are entitled for 9% interest on their capitals, only when there are profits

Are entitled for interest on capital at the bank rate, only when there are profits

Are not entitled for any interest on their capitals

The permanent and continuous diminution in the quality, quantity or value of an asset:

Choose an answer

Appreciation

Diminution

Reduction

Depreciation

Decline in the value proportionate to the quantum of production e.g. mine, quarry etc.

Choose an answer

Amortization

Depletion

Depreciation

Wear and tear

Single entry system is generally adopted by,

Choose an answer

Small business concerns

Large business concerns

Medium business concerns

All of the above

In single entry system nominal accounts and some assets accounts balances are not available so it is not possible to prepare,

Choose an answer

Debtors account

Creditors account

Trial balance

Statement of affairs

To calculate the true net profit or net loss in single entry system it is necessary that the amount of fresh capital should be subtracted from,

Choose an answer

Adjusted closing capital

Closing capital

Cash in hand

Cash at bank

Fluctuation

Choose an answer

Does not reduce productive capacity

May rise or fall the value of an asset

Is generally irregular

All of these

When interest is allowed on the capitals of the partners, it is calculated on the

Choose an answer

Capital in the beginning of the year

Capital at the end of the year

Capital at the end less drawings if any

Average capital

Old profit sharing ratio minus new profit sharing ratio is equal to

Choose an answer

Sacrificing ratio

Gaining ratio

Distributing ratio

None of these

Depreciation is an:

Choose an answer

Expense

Revenue

Liability

Capital

Receipts and payments account records transaction relating to

Choose an answer

Past year

Future year

Present year

All of the above

Goodwill is valued when

Choose an answer

Profit is earned

Loss is suffered

One year is completed

New partner is admitted

Opening capital is calculated by taking the difference between,

Choose an answer

Opening assets and closing assets

Opening assets and closing liabilities

Opening assets and Opening liabilities

Closing assets and closing liabilities

In accountancy 'consignment' signifies

Choose an answer

Goods forwarded from one place to another

Goods forwarded by a person to another

Goods dispatched by its owner to his agent

Goods dispatched by its owner tho his agent for the purpose of sale

Suppose the average profit of last five years is Rs.7000, normal profits Rs.4000, then the value of goodwill on the basis of three years purchase under super profits method will be

Choose an answer

Rs.6000

Rs.9000

Rs.12000

Rs.15000

Suppose A, B & C are partners, sharing profits in the ratio of 2:2:1 respectively, What will be the new ratio if C retires in the absence of an agreement?

Choose an answer

2:2

2:1

2:3

1:2

Decrease in the value of an asset due to change in habit or taste of people.

Choose an answer

Efflux of time

Accident

Obsolescence

Wear and tear

In the absence of an agreement, the partners are entitled to interest on capital at the rate of:

Choose an answer

5% p.a.

6% p.a.

10% p.a.

None of these

The end or termination of partnership is called:

Choose an answer

Admission

Retirement

Death

Dissolution

Reserve of bad and doubtful appearing in the books at the time of dissolution is transferred to:

Choose an answer

Debtors account

Revaluation account

Reserve for bad debts account

Realization account

A company is formed by,

Choose an answer

Owners

Directors

Managers

Employees

This is the principal form of company,

Choose an answer

Company limited by shares

Unlimited company

Company limited by guarantee

Association not for profit

Gaining ratio is calculated on:

Choose an answer

Admission

Retirement

Death

'b' & 'c'

Current accounts of the partners should be opened when the capitals are

Choose an answer

Fluctuating

Fixed

Either fixed or fluctuating

Variable

On the admission of a new partner the decrease in the value of assets is debited to

Choose an answer

Profit and loss adjustment account

Assets account

Old partners capital account

New partner capital account

On the admission of a new partner the increase in the value of assets is debited to

Choose an answer

Profit and loss adjustment account

Assets account

Old partners capital account

New partner capital account

In Partnership, in case of banking business, the partners must not exceed,

Choose an answer

20

15

10

5

Income and expenditure account shows

Choose an answer

Cash in hand

Surplus or deficit

Cash at bank

Capital account

Goodwiil is an

Choose an answer

Tangible asset

Intangible asset

Wasting asset

Fictitious asset

General reserve or accumulated profits at the time of dissolution is transferred to:

Choose an answer

Realization account

Solvent partners capital account

Insolvent partner's capital account

All partners capital accounts

In consignment expenses after delivery of goods to consignee are borne by

Choose an answer

Purchaser

Seller

Consignor

Consignee

A company is managed by,

Choose an answer

Shareholders

Managers

Directors

Employees

Due to drawings made during the year, the closing capital will,

Choose an answer

Increase

Decrease

Constant

Multiply

The company which can be formed by at least seven members,

Choose an answer

Private company

Public company

Partnership

Sole proprietorship

When the incoming partner pays the firm for goodwill in cash, the amount should be debited in firms books to

Choose an answer

Goodwill account

Capital account of the incoming partner

Cash account

All of the above

According to provision of companies ordinance 1984 dividend cannot be declared without.

Choose an answer

Appreciation

Depreciation

Replacement of assets

"a" and "b"

Both aspects of a transaction must be recorded in,

Choose an answer

Single entry system

Barter system

Double entry system

Islamic system

Maximum members in public company are,

Choose an answer

10

100

None of these

In case of dissolution, when all the partners are solvent, closing of various assets are credited to:

Choose an answer

Realization account

Revaluation account

Profit and loss account

Assets account

Consignee is

Choose an answer

Principal

Owner

Debtor of the consignee

None of these

A new partner may be admitted to a partnership

Choose an answer

With the consent of all the old partners

With the consent of any one of the partners

With the consent of two third of the old partners

Without consent of old partners

Dissolution due to completion of venture, death of partner, Insolvency of partner or expiry of the terms fixed is called:

Choose an answer

Dissolution by agreement

Dissolution by notice

Dissolution on the happening of certain contingencies

Dissolution by court

In the absence of an agreement, partners shall

Choose an answer

Be paid salaries

Not be paid salaries

Be paid salaries to those who work for the firm

Paid salaries to all the partners

The relationship between seller and buyer of goods is that of a

Choose an answer

Principal and agent

Debtor and creditor

Banker and customer

Consignor and customer

The value of goodwill is calculated by multiplying the average profit of a given number of past years by an agreed number under

Choose an answer

Average profits method

Super profits method

Capitalization method

Revaluation method

In case of consignment, risk attached to the goods sold before the goods consigned are sold lies with the

Choose an answer

Consignee

Consignor

Buyer

Debtor

Closing capital in single entry system is calculated by preparing,

Choose an answer

Opening statement of affairs

Closing statement of affairs

Opening balance sheet

Closing balance sheet

The maximum amount which each partner will draw from the business in anticipation of the share of profit is his:

Choose an answer

Drawings

Profit

Loss

Capital

The value of goodwill can be calculated with the help of

Choose an answer

Average profits method

Super profits method

Capitalization method

All of the above

It sets out the terms on which partners agreed to form a partnership

Choose an answer

Partnership agreement

Partnership deed

"a" and "b"

None of these

The register which is maintained by consignor to keep full record of goods consigned is called

Choose an answer

Consignment outward book

Consignment inward book

Consignment purchases book

Consignment in transit book

In increased net worth method, profit or loss is calculated by preparing,

Choose an answer

Income and expenditure account

Profit and loss account

Statement of profit or loss

Balance sheet

Partnership agreement cantinas

Choose an answer

Name of partnership business

Nature of partnership business

Ratio in which profits and losses are to be shared by partners

All of the above

On retirement of a partner, the share of retiring partner is taken by

Choose an answer

New partner

Remaining Partners

Government

Legal representatives of retiring partner

Depreciation which occurs due to certain inherent normal causes in known as:

Choose an answer

Internal depreciation

External depreciation

Seasonal depreciation

All of these

In case of retirement amount of general reserve or any other profit is credited to all the partners in:

Choose an answer

Old profit sharing ratio

New profit sharing ratio

Sacrifice ratio

Gaining ratio

In case of dissolution closing of various liabilities are credited to:

Choose an answer

Realization account

Revaluation account

Profit and loss account

Liabilities account

If depreciation is not taken into account, the value of asset in the books.

Choose an answer

May be more

May be less

No change

May be more or less

The manufacturer or wholesaler who sends his goods for sale purpose is known as

Choose an answer

Consignee

Consignor

Agent

Drawer

Depreciation

Choose an answer

Reduces productive activity

Reduces value of asset gradually

IS a regular loss

All of these

In income and expenditure account

Choose an answer

Expense are recorded on debit side

Revenues are recorded on credit side

Does not start with any opening balance

All of the above

The share of profit to a new partner in the future profits without any express agreement as to who will contribute to new partner's share of profit is implied that old partners contribute

Choose an answer

Equally

In proportion of their capital

In their profit sharing ratio

None of these

In case of dissolution, the sale of unrecorded asset is debited to:

Choose an answer

Realization account

Sale account

Asset account

Cash account

Net worth is equal to,

Choose an answer

Assets - Liabilities

Liabilities - Assets

Liabilities + Capital

Capital + Assets

In case of dissolution, the payment of unrecorded liability is debited to:

Choose an answer

Realization account

Liability account

Revaluation account

Cash account

In case of dissolution, assets taken over by a partner should be debited to:

Choose an answer

Realization account

Partner's capital account

Asset account

Cash account

It is prepared to find out the result of dissolution, i.e. profit or loss:

Choose an answer

Realization account

Revaluation account

Profit and loss account

Profit and loss appropriation account

According to the decision of Garner Vs Murray rule, the loss of insolvent partner is to be shared by solvent partners in the:

Choose an answer

New profit sharing ratio

Old profit sharing ratio

Capital ratio

Gaining ratio

The physical deterioration in asset due to use in business.

Choose an answer

Depletion

Obsolescence

Wear and tear

Accident

External causes of depreciation.

Choose an answer

Obsolescence

Efflux of time

Accident

All of these

Depreciation means:

Choose an answer

Exhaustion of the effective life of an asset

Diminution in intrinsic value of an asset

Reduction in the value of fixed asset due to use in business

All of the above

The benefit and advantage of the good name or reputation of a business.

Choose an answer

Liability

Goodwill

Amortization

Depreciation

Suppose A, B & C are partners, sharing profits in the ratio of 7:4:3 respectively, What will be the new ratio if B retires in the absence of an agreement?

Choose an answer

7:4

7:3

4:3

3:7

Companies ordinance defines the company under section,

Choose an answer

1(7)

2(7)

3(7)

2(8)

The excess of actual profits over normal profits is known as

Choose an answer

Profit

Loss

Super profits

Super loss

The company which can be formed by at least two members,

Choose an answer

Private company

Public company

Sole proprietorship

All of the above

Non-profit making organizations

Choose an answer

Buy goods

Manufacture goods

Sell goods

None of these

In single entry system ledger contains the accounts of,

Choose an answer

Debtors, creditors and cash

Wages and carriage

Salaries and insurance

Assets and liabilities

Depreciation may be ascertained exactly in case of

Choose an answer

Lease holds property

Machinery

Patent right

"a" and "c"

The company in which members are personally liable for the debts of company

Choose an answer

Company limited by shares

Unlimited company

Company limited by guarantee

Association not for profit

The debit balance of interest on loan account is transferred to:

Choose an answer

Partner's capital account

Profit & loss account

Partner's loan account

Trading account

How many methods are available to calculate the profit or loss under single entry system,

Choose an answer

One

Two

Three

Four

Where a partner to entitled to interest on capital subscribed by him, such interest will be payable

Choose an answer

Only out of profits

Only out of capitals

Out of profits or out of capitals

None of these

In receipt and payments account

Choose an answer

No narration is written

No ledger reference is recorded

Daily cash balance cannot be ascertained

All of the above

The balance left in the capital accounts in case of dissolution is transferred to:

Choose an answer

Revaluation account

Realization account

Bank account

Profit & loss appropriation A/c

Joint stick company is formed under

Choose an answer

Finance society act 1913

Partnership act 1932

Companies ordinance 1984

Common carrier act 1865

Non-profit making organizations are established for

Choose an answer

Profit

Charitable or religious purpose

To manufacture goods

To help the rich people

Depreciation occurs

Choose an answer

Up to one year

Up to two years

Till the last day of the estimated working life of asset

Up to the replacement of old asset

Shareholders are,

Choose an answer

Owners

Directors

Managers

Employees

In case of dissolution, the payment of liabilities should be credited to:

Choose an answer

Realization account

Cash account

Profit and loss account

Liabilities account

Income and expenditure account records the transactions of

Choose an answer

Revenue nature

Capital nature

Revenue and capital nature

None of the these

Goodwill is an:

Choose an answer

Expense

Profit

Asset

Liability

In case of retirement funds for payment may be provided out of

Choose an answer

Firm's own resources

Borrowing by the firm

Additional funds may be bought in by continuing partners

All of the above

In case of retirement, revaluation loss should be debited to:

Choose an answer

Retiring partner's capital A/c

Remaining partners capital A/c

All partners capital A/c

Revaluation A/c

To calculate the value of capital both at the beginning and at the end of year in single entry system we prepare,

Choose an answer

Balance sheet

Trading account

Trial balance

Statement of affairs

A partner has a right to

Choose an answer

Take part in the conduct of business

Inspect the books of the firm

Share in profit

All of these

On the admission of a partner, goodwill account is to be raised should be debited to

Choose an answer

Partners capital accounts

Goodwill account

Cash account

New partner capital account

The gradual decrease in the efficiency of an asset is called:

Choose an answer

Appreciation

Depreciation

Construction

Reconstruction

In case of retirement, when goodwill is raised at full value, is credited to:

Choose an answer

Retiring partners capital A/c

Remaining partners capital A/c

All partners capital A/c

Goodwill A/c

In single entry system real accounts are not maintained so the preparation of,

Choose an answer

Correctly

Effectively

Wrongly

Approximately

In case of retirement, when goodwill is raised with retiring partner's share but written off is credited to:

Choose an answer

Retiring partners capital A/c

Cash A/c

Goodwill A/c

Remaining partners capital A/c

In the absence of an agreement, interest on drawings is to be charged by the firm at the rate of:

Choose an answer

5% p.a.

6% p.a.

8% p.a.

None of these

The profit on the revaluation of assets and liabilities on the retirement of a partner should be credited to the capital account / accounts of:

Choose an answer

Retiring partner

Remaining partners

All the partners

None of these

Non-profit seeking organizations prepare

Choose an answer

Manufacturing account

Trading account

Income and expenditure account

Profit and loss account

The current account of a partner

Choose an answer

Will always have a credit balance

Will always have a debit balance

May have a debit balance or a credit balance

None of these

On retirement of a partner in partnership it is necessary to calculate

Choose an answer

New profit sharing ratio

Goodwill

Revaluation of assets and liabilities

All of these

The liability of the members is limited according to undertaking of members to contribute to the assets of the company in the event of its being wound up,

Choose an answer

Company limited by shares

Unlimited company

Company limited by guarantee

Association not for profit

Suppose A, B & C are partners, sharing profits in the ratio of 1/2,3/10,2/10 respectively, What will be the new ratio if B retires and his share is taken up by A and C in the ratio of 2:1.

Choose an answer

5 : 3

5 : 7

7 : 3

10 : 3

In case of dissolution, the transfer of undivided profit should be debited to:

Choose an answer

Realization account

Revaluation account

Profit and loss account

Partner's capital account

The court may dissolve the firm:

Choose an answer

When a partner has become of unsound mind

A partner is guilty of misconduct in carrying on the business

A business of the firm cannot be carried on except at a loss

All of the above

Retirement of a partner dissolves

Choose an answer

Partnership

Firm

Business

"b" & "c"

In cash book

Choose an answer

Each entry is followed by narration

Ledger reference is recorded

Each transaction is recorded in chronological order

All of the above

Maximum members in private company are,

Choose an answer

10

50

100

150

Single entry system is suitable where,

Choose an answer

Small amount of cash transactions are more

Large amount of cash transaction are more

Smallamount of cash transaction are more

Largeamount of cash transaction are more

Due to fresh capital introduced during the year, the closing capital will,

Choose an answer

Increase

Decrease

Constant

Multiply

Single entry system contains,

Choose an answer

A daybook or general journal

A cash book

Ledger accounts for individual customers and creditors

All of the above

Internal causes of depreciation:

Choose an answer

Wear and tear

Depletion

Obsolescence

"a" and "b"

In private company directors should be at least,

Choose an answer

4

3

2

1

Receipts and payments account shows

Choose an answer

Debit and credit balances of ledgers

Incomes and expenditures

Cash receipts and payments

Assets and liabilities

In case of dissolution, partners personal assets are first used for the payment of:

Choose an answer

Personal liabilities

Firm's liabilities

Court liabilities

None of these

The method for preparing the final accounts in trading concerns and non-profit making organizations are

Choose an answer

Same

Different

Easy

Difficult

Gaining ratio is equal to:

Choose an answer

New ratio + Old ratio

New ratio - Old ratio

Old ratio - New ratio

Old ratio + New ratio

The person to whom the goods are sent is known as

Choose an answer

Consignor

Consignee

Drawer

Drawee

In non-profit making organization final accounts contains

Choose an answer

Income and expenditure account and balance sheet

Receipts and payments account and balance sheet

Receipts and payments account and statement of affairs

Profit and loss account and balance sheet

The amount of loan advanced by a partner to partnership is transferred to:

Choose an answer

Partner's capital account

Partner's drawings account

Partner's loan account

none of these

In consignment all the expenses, either paid by the consignor himself or by the consignee are borne by the

Choose an answer

Consignor

Consignee

Purchases

All of these

The parties involved in consignment are

Choose an answer

Two

Three

Four

Five

X, Y and Z are partners in a firm. If B is to be admitted as a new partner

Choose an answer

Old partnership has to be dissolved

Old firm has to be dissolved

Both old firm and partnership have to be dissolved

Neither firm nor parnership needs to be dissolved

Joint life policy at the time of dissolution is transferred to:

Choose an answer

Realization account

Solvent partners capital

Insolvent partner's capital account

All partners capital account

It is paid to consignee if he take risk of bad debts

Choose an answer

Commission

General commission

Ordinary commission

Delcredre commission

Receipts and payments account records the transactions of

Choose an answer

Revenue nature

Capital nature

Revenue and capital nature

None of these

We write depreciation on the

Choose an answer

Debit side of trading account

Credit side of trading account

Debit side of profit and loss account

Credit side of profit and loss account

The interest on partners capital accounts is to be credited to

Choose an answer

Partners capital accounts

Profits and loss account

Interest account

Trading account

Non-profit seeking organization income and expenditure account performs the same function as profit seeking organization's

Choose an answer

Trading and profit and loss account

Balance sheet

Bank account

Petty cash book

Depreciation is charge against

Choose an answer

Expense

Revenue

Liability

Capital