Online Test

Question # 1

If more than two accounts are involved in one transaction the journal entry is called

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Simple entry

Skeleton entry

Compound entry

Double entry

Which of the following account is increased by debit entries

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Capital A/c

Building A/c

Sales A/c

Purchase return A/c

Goods returned to supplier should be credited to:

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Supplier A/c

Purchase return A/c

Sales return A/c

Purchases A/c

Cheque received but not deposited recorded in cash book is

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Cash column

Discount column

Bank column

None of these

The cheque which is returned by the bank unpaid is called

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Cross cheque

Dishonour cheque

Bearer cheque

Order cheque

Accounting is the language of

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Govt

Trade

Business

Commerce

Preliminary Exp.Incurred for formation of Joint Stock Company represent.

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Capital loss

Capital Exp.

Revenue loss

Deferred Revenue Exp

Any physical that has money value is

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Transaction

Asset

Intangible asset

Goodwill

Errors which affect income statement belong to

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Real A/c

Personal A/c

Nominal A/c

None of these

Journal is prepared in

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Columnar form

Vertical form

Horizontal form

Raw form

Balance sheet is a statement of

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Assets

Both first

Liabilities

None of these

Bill receivable and debtor are

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Long term assets

Fictitious assets

Fixed assets

Current assets

Goods returned by a customer should be debited to

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Sales A/c

Customer A/c

Purchase A/c

Sales return A/c

Expenses paid in advance are called

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Prepaid expenses

Deferred expenses

Expired expenses

Both prepaid & expired expenses

Transaction which is omitted from record is known as

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Errors of omission

Errors of principle

Errors of commission

Compensating errors

Bank reconciliation represents

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Ledger

Statement

Journal

Both ledger and statement

Prepaid expenses are

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Expense

Liability

Asset

None of these

The discount which is calculated on list price of goods is called

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Trade discount

Rebate

Cash discount

None of these

The modern system of book keeping is based on:

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Double account system

Single entry system

Single account system

Double entry system

Pass book is prepared in the book of

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Bank

Guarantor

Customer

None of these

The book meant for recording all cash transactions is called

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Purchase book

Cash book

Sales book

Pass book

The science and art of correctly recording business dealing in a set of books is called

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Book keeping

Auditing

Accounting

Recording

The errors which cancel themselves out are called

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Errors of omission

Compensating errors

Errors of commission

None of these

Trial balance is prepared to detect

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Errors of omission

Compensating errors

Errors of commission

Errors of principles

Any activity undertaken for the purpose of earning profit is called

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Dealing

Business

Performance

Duties

Carriage paid on goods purchased is a

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Direct expense

Opening expense

Indirect expense

General expense

Accounting is called of business:

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Heart

Ear

Tongue

Eye

A bill of exchange is accepted by

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Debtor

Holder

Creditor

Seller

A bill of exchange is drawn by a

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Debtor

Holder

Creditor

None of these

Compound entry affected at least

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Two account

One account

Three account

Four account

The book in which small payments like refreshment tissues etc are recorded is called

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Main cash book

Cash account

Petty cash book

Both main cash book & petty cash book

Business debts are also called is

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Capital

Liabilities

Drawing

Assets

Unearned income is shown as

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Assets

Expenses

Liabilities

Income

Net loss is transferred in balance sheet to

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Capital

Losses

Assets

Deferred losses

The person who draws a bill of exchange is known as

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Drawer

Payee

Drawee

Bank

Which of these is a fixed asset:

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Cash

Plant

Stock

Prepaid expenses

The purchase of machinery on account would:

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Increase one asset and decrease another asset

Increase an asset and decrease liability

Increase an asset and increase capital

Increase an asset and increase a liability

The process of recording business transactions in the journal is called

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Posting

Classifying

Journalising

Entry

Cash sales are recorded in

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Sales book

Purchase book

Cash book

Pass book

Cash and goods invested by the proprietor in business is called

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Investment

Capital

Drawings

None of these

Which of these accounts is increased by credit entries:

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Machinery A/c

Rent A/c

Sales A/c

Purchase A/c

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

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Fictitious assets

Floating assets

Contingent assets

Dependent assets

For payment of bill of exchange grace days are

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2 days

3 days

5 days

4 days

Payment for freight on raw material purchased is called

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Capital payment

Deferred revenue payment

Revenue payment

None of these

Freight paid on machinery purchased is a

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Revenue expenditure

Capital expenditure

Capital loss

Revenue loss

Cash purchases are recorded in large organizations in

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Purchase day book

General journal

Purchase journal

Cash book

Bad debt arises from

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Sale on account

Account receivable

Cash sales

Account payable

Operating expenses represent

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G.P- Operative Exp

Selling + General Exp

Selling administrative Exp.D)

All of these

Business debts are known as

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Liabilities

Expenses

Assets

Owner's

Bad debts are shown in the

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Trading A/c

None of these

Profit & Loss A/c

Both first

The expenses incurred in purchasing land property represent

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Capital expenditures

Revenue loss

Revenue expenditures

Deferred revenue expenditures

Trail balance shows

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Complete accuracy

Arithmetical accuracy

Whole accuracy

Full accuracy

Which of the following books is called book of original entry:

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Cash book

Journal

Ledger

Sales book

Carriage paid on goods sold is a

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Direct expense

Operating expense

General expense

Selling expense

Favourable bank balances means

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Credit balance of cash book

Debit balance of cash book

Debit balance of pass book

None of these

Bank reconciliation is prepared by

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Bank

Creditors

Auditor

Accountant

Carriage paid on purchase of furniture is a

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Revenue expenditure

Capital expenditure

Revenue Loss

Capital loss

Accounting principle are generally based on

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Theory

Subjectively

Practicability

None of these

The amount of salaries paid to javed should be credited to

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Javed A/c

Cash A/c

Salaries A/c

None of these

Which of theses assets is an intangible asset

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Building

Cash

Furniture

Good will

If more than two accounts are involved in a journal entry it is called

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Double entry

Contra entry

Compound entry

Single entry

Petty cash book is a branch of

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Pass book

Journal

Cash book

Ledger

The person to whom goods are sold on credit is called

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Seller

Creditor

Debtor

Buyer

Furniture and machinery represent

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Fixed assets

Fictitious assets

Current assets

Intangible assets

In accounting equation assets are equal to

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Capital

Liabilities

Capital + Liabilities

The entry which is recorded on the both sides of three column cash book is called

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Single entry

Compound entry

Double entry

Contra entry

Noting charges are paid when bill is

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Honoured

Discounted

Dishonoured

None of these

Modern system of book keeping is

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Single entry system

Double entry system

Modern system

None of these

Important types of ledger are

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General ledger

Proprietor ledger

Creditors ledger

General ledger & creditor ledger bot

Discount received is a

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Asset

Revenue

Liability

Expenses

A bill of exchange is accepted by:

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Drawer

Payee

Drawee

Bank

Credit sales are recorded in

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Cash book

Purchase book

Sales book

Pass book

Sales return is also called

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Return inward

Return to seller

Return outward

Return inward and return to seller both

The amount of cash or goods with drawn by the proprietor for personal use is called:

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Expenses

Revenue

Capital

Drawings

Stationary is classified into

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Factory supplies

Sales supplies

Office supplies

Trade supplies

Nominal accounts are related to:

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Assets

Creditors

Liabilities

Expenses + Income

To any business bad debts is

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An asset

An Income

A loss

A liability

Debit balance of cash book is also called

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Unfavourable balance

Favourable balance

Negative balance

Both un favourable and favourable balance

Cash or goods taken away by owner for personal use from business are known as:

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Capital

Drawings

Revenue

Expense

A--------------- is an account in which those transaction are entered which cannot be placed to their accounts

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Nominal account

Suspense account

Personal account

Debtor account

Provision of doubtful debts are also known as:

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Allowances for uncollectable

Allowances for collectable

Bad debts

None

How many types of inventories are in cost of goods sold statement?

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1

2

3

4

A property which is received by virtue of a will of a person after his death is known as

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Legacy

Donation

Subscription

Gift

How many types of bank accounts are there?

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4

3

5

6

Deferred liabilities are debts which are repayable less than ----------

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One month

Six month

One year

None

Quick assets are

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Cash in hand

Cash at bank

Debtors

All of the above

During period of rising material prices, ----------- method results in profit inflation

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LIFO

FIFO

Weighted average

All of the above

According to possible for an event or transaction which is not measurable in terms of money

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True

False

May be

None

How many of grace are given?

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5

4

3

2

Good received note is prepared by

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Purchase department

Sales department

Receiving department

All of the above

Spoiled goods cannot be

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Sold without repairing

Repair and sold as damaged goods

Both A and B

None of above

If spoiled good are considered as abnormal part of production process then debited to

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Work in process

General expense

F-o-H control

None of above

Tenor is the period of time ------------ which a bill becomes payable

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Before

After

Both a and b

None

Lead time is the time between the time on item reaches --------------- and ---------- of

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Order level, dispatch of material

Order level, maximum level

Maximum level, minimum level

Order level, actual receipt

Endorsement is made:

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For settlement of debts

For settlement of income

For settlement of profit

None

In job order costing system, each job is assigned a job cost

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Unit

Center

Driver

Sheet

Rebate is the --------- in the amount of bill paid

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Premium

Increase

Expense

Concession

Which one is not a classification according to the accounting period?

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Capital expenditure

Revenue expenditure

Product cost

Administrative cost

Trading account shows ----------- result.

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Net

Gross

Profit

Loss

Debentures are

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Fixed assets

Fixed liabilities

Capital

Prepaid expenses

Section of the business to which cost can be charged is termed as

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Cost driver

Cost center

Cost unit

All of above

The cost flow must match the

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Output

Outflow

Inflow

Workflow

What is negotiable instrument?

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A document which is not transferable

A document which is transferable

A document which is accepted

None

Material are charged to production at actual cost under

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Weighted average method

FIFO method

LIFO method

Both ii & iii

Name the main accounts which are prepared in accounting?

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Assets, liabilities, income and expenses

Assets, liabilities, income and revenue

Assets, owner's equity, income and expenses

Assets, liabilities and expenses

How many branches are there in accounting?

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1

3

2

4

What is amortization?

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Decrease in the value of fixed assets

Decrease in the value of intangible assets

Increase in the value of fixed assets

Increase in the value of intangible assets

What is accounting period?

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It is a time for which business prepares its financial statements

It is time for which business prepares its profit and loss statement

It is a time for which business prepares its balance sheet

None

Statement of a affairs is a sort of -----------

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Profit and loss statement

Nominal account

Statement of changes in equity

Balance sheet

Profit will be lower where prices are rising under

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FIFO method

LIFO method

Weighted average method

All of the above

Difference in cost of alternative choices is called

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Total costing

Differential costing

Full costing

Variable costing

Assets which have to no market value are called

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Fictitious assets

Liquid assets

Intangible assets

Real assets

What is accumulated depreciation?

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Depreciation expense of the current year

Sum of all depreciations in different accounting year

Depreciations of previous accounting year

None

If applied factory overhead is less than actual factory overhead, it is called

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Applied F.o.H

Over applied F.o.H

Under-applied F.o.H

None of above

Which one is not accounting convention?

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Materiality

Full disclosure

Consistency

Going concern

From the following statements which one is not true about over applied F.o.H

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Less from cost of goods sold at normal

Less from entire production if required

Add in gross profit if required

Less from Net profit.

Historical cost which is irrecoverable in a given situation is called

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Imputed cost

Standard cost

Opportunity cost

Sunk cost

The cost flow must watch the

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Output

Outflow

Inflow

Workflow

If spoiled goods are considered a normal part of production process than debit to

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Work in process

General expense

F.o.H control

None of above

The ------------- includes a control account entitled general ledger that shows is equity of the general office in the factory.

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General ledger

Head office ledger

Factory ledger

None of these

Doubtful debts are shown on:

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Profit side of statement of profit and loss

Liabilities side of balance sheet

Asset side of balance sheet

Not shown anywhere

Depreciation is a loss due to wear and tear of an asset.

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Correct

Incorrent

May be

None

What are accrued expenses?

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The expenses that have been incurred during current year and paid till the end of current year

The expenses that have been incurred previous year and paid in the current year

The expenses that have been incurred during current year and not paid till the end of current year

The expenses that have been incurred previous year and not paid till the end of current year

Depreciation expenditure is a

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Fixed cost

Variable cost

Semi-variable cost

Step fixed cost

Treble column cash book has three columns of:

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Cash, bank and discount

Income, expense and bank

Cash, bank and profit or loss

None

Cost which is calculated before manufacture operation is called

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Sunk cost

Mixed cost

Standard cost

None of above

A cost whose magnitude will be affected by decision being made is called

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Historical cost

Relevant cost

Irrelevant cost

Sunk cost

The technique and process of ascertaining cost is termed as

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Costing

Cost accounting

Calculation of cost

Controlling cost

The primary objective of cost accounting is to

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Control cost

Calculate profit

Avoid cost

All of above

Under perpetual inventory system stock taking is under taken at the

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Start of the accounting year

End of the accounting

Regular bases

None of above

In payroll include the remunerations of

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Direct labour

Indirect labour

Both a & b

None of the above

Which one of the following is not a negotiable instrument?

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Cheque

Promissory note

Bill of exchange

None of the above

Dishonor of the bill occurs when:

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The drawer refuse to pay

The acceptor refuses to meet the bill on due date

The endorsee accepts to meet the bill

None

Per Unit cost is calculated by dividing the cost of goods sold by

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The number of units sold

The number of units purchase

The number of units manufactured

All of the above

Hypothetical cost which are specially computed outside the accounting system for the purpose of decision making is called

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Future cost

Replacement cost

Imputed cost

Sunk cost

Cost which cannot be conveniently identified with individual cost unit is called

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Direct material cost

Indirect material cost

Indirect labour cost

Caring cost

A credit purchases are:

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If goods purchased and payment made at the same time

If goods purchased and payment not made at the same time

If goods sold and payment receive at the same time

If goods sold and payment not receive at the same time

Loss which arises due to ----------- is known as abnormal loss

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Breakage of goods

Leakage

Fire

Shrinkage

Costs whose consumption may be identified with specific production units in called

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Direct labour cost

Indirect labour cost

Direct material cost

Indirect material cost

Goodwill is ----------- for company.

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Intangible asset

Fixed asset

Current asset

Quick asset

Outstanding expenses are also known as

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Prepared expenses

Accrued expenses

Un-earned income

None

Accounts which are related with properties are known as

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Real accounts

Nominal accounts

Property accounts

A and C are correct Accounting principles:

The bills which are drawn and accepted against the sale and purchase of goods on credits are called

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Trade bills

Bill of exchange

In-land bills

Foreign bills

In bill of exchange, the party who accepts a bill is known as:

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Drawer

Drawee

Payee

Third party

The objective of financial accounting is to ascertain:

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True results of profit

True results of loss

True results of profit or loss

None

Variable cost and fixed cost have been treated as product cost in

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Absorption costing

Direct costing

Full costing

All of above

Offsetting expenses against revenue is the concept of:

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Realization

Dual aspect

Matching

Conventions

Accounting is the

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Art

Science

Both

None

Compound entry is an entry in which:

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More than one account is debited

More than one account is credited

Both a and b are correct

None of the above

Work in process opening and closing inventory includes:-

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Arterial in process

Labour in process

F.o.H in process

All of the above

Manufacturing concern cycle is ---------- than trading concern cycle:

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Shorter

Greater

Medium

None of above

In operating expense includes

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Marketing expense

Admin expense

Selling expense

All of the above

Which one is non-manufacturing costs?

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Direct material cost

Labour cost

Research and development cost

All of above

Which ratio tells how many times in a year stock is used up and replaced?

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Gross profit ratio

Net profit ratio

Cost ratio

None of these

Cost goods sold is Rs. 1650, gross profit ratio is 17.5% then sales is

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1800

1900

2000

2200

Doubtful debt are:

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Definite loss to the business

Definite profit to the business

Expected loss to the business

Expected profit to the business

The cost of holding the stock in storage is called

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Ordering cost

Material cost

Caring cost

All of the above

Petty cash book is a book which record

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Assets

Liabilities

Large payments

Small payments

Which one is not a functional classification?

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Manufacturing cost

Marketing cost

Finance cost

Mixed cost

Purchase Requisition is sent to

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Accounts department

Purchase department

Finance department

None of above

The primary object of non-profit organizations is

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Not to earn profit

Work for the welfare of society

Buy/sell goods

A and B but not C

What are bad debts?

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Debts which are irrecoverable from the debtors

Debts which are recoverable from the debtors

Debts which are irrecoverable from the creditors

Debts which are recoverable from the creditors

The stages of accounting cycle are

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Transaction-ledger-journal-trial balance-final accounts

Transaction-journal-ledger-trial balance-final accounts

Transaction-journal-trial balance-ledger-final accounts

Transaction-journal-ledger-final accounts-trial balance

Bin card is maintained by

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Purchase manager

Sales manager

Store keeper

Finance manager

Realisation concept is the concept in which revenue is ------------ at the time when goods are sold or services rendered.

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Recognized

Not recognized

Paid

Received

Sales prices is calculated as follow:-

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Cost + operating expense

Direct material + Direct labour + F.o.H

Cost + operating expenses + profit

None of above

The price at which assets will be sold at the end of its useful life is known as:

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Scrap value

Residual value

Written down value

All of the above

A person is said to be insolvent when his

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Assets are sufficient

Assets are enough to pay his liabilities

Assets are not enough to pay his liabilities

None

Excess of assets over liabilities is known as:

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Capital fund

Accumulated fund

Surplus fund

All options are correct

Which one is not include in factory overhead?

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Power hear & light

Indirect labour cost

Depreciation of plant

Salary of accountant

Any written evidence of a business transaction is known as

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Voucher

Pay-in-slip

Debit note

Credit note

Office salaries are include in

Choose an answer

Direct material cost

Indirect material cost

Factory overhead cost

Total payroll