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Q.1
Term 'Credit' means _____ by the business
Receiving of benefits
It has no effect on business
Providing benefits
It depends upon items
Q.2
When a liability is reduced or decreased, it is recorded on the:
Left or credit side of the account
Right or debit side of the account
Right or credit side of the account
Left or debit side of the account
Q.3
When capital is increased by an amount, it is recorded on the:
Left or credit side of the account
Right or debit side of the account
Right or credit side of the account
Left or debit side of the account
Q.4
The process of recording in Journal is done
Two times in a year
Once in a year
Frequently during the accounting period
At the end of an accounting period
Q.5
General Journal is a book of _____ entries
First
Original
Secondary
Generic
Q.6
Which of the following is the effect on net income if a business decreases its provision for bad debts?
It will increase net income
It will decrease net income
No effect
It will increase gross profit and net income
Q.7
Which of the following does not appear in Balance sheet?
Building
Cash
Goodwill
Rent expenses
Q.8
Introduction of capital by owner of business is recorded on which side of a cash book?
Receipts
Payments
Incomes
Expenditures
Q.9
Every business transaction affects at least ____ accounts
One
Two
Three
Infinite
Q.10
Which of the following account with normal balance is shown at the credit side of a trial balance?
Cash account
Bank account
Equipment account
Accrued expenses account
Q.11
Accrued expenses are considered as
Asset
Liability
Gain
Income
Q.12
Prepaid expenses are considered as
Asset
Liability
Loss
Capital
Q.13
Earned but not yet received income is treated as
Asset
Liability
Loss
Capital
Q.14
Revenue earned but not yet received by the business is known as
Contra asset revenue
Accrued expenses
Accrued revenue
Unearned revenue
Q.15
Which of the following is not regarded as the fundamental concept that is identified by IAS-1?
The going concern concept
The separate entity concept
The prudence concept
Correction concept
Q.16
Identify the nominal account
Machinery account
Building account
Creditors account
Rent expenses account
Q.17
A higher inventory ratio indicates
Better inventory management
Quicker turnover
Both A and B
None of the above
Q.18
Bank Reconciliation statement is the comparision of a bank statement (sent by bank) with the
Cash receipt journal
Cash payment journal
Cash book
Financial statements
Q.19
A cheque returned by bank marked "NSF" means that
Bank can't verify your identity
There are not sufficient funds in your account
Cheque has been forged
Cheque can't be cashed being illegal
Q.20
Postage stamps on hand are considered as
Bank balance
Prepaid expenses
Accounts receivable
Creditors
Q.21
Petty cash fund is supposed to be replenished
Every year
Every half year
Every year
At the end of every accounting period
Q.22
A credit balance in cash book indicates
Bank balance
Cash at bank
Bank overdraft
Bank underdraft
Q.23
Cash discount is allowed on ______ repayment of debt
Lump sum
Prompt
Actual
None of them
Q.24
Cash book is prepared by
Bank
Accountant of business
Manager of a company
Bank's cashier
Q.25
Bank Reconciliation statement is prepared by
Accountant of business
Manager of business
Controller of business
Accountant of the bank
Q.26
Unpresented cheques are also referred to as
Uncollected cheques
Uncredited cheques
Outstanding cheques
Bounced cheques
Q.27
Favourable balance of cash book implies
Credit balance of cash book
Debit balance of cash book
Bank overdraft
Adjusted balance of cash book
Q.28
A cash deposit made by business appears on the bank statement as ____ balance
Debit
Credit
Expenses
Liability
Q.29
The closing balance of petty cash book is considered as
Liability
Asset
Expenses
Income
Q.30
Payment of rent expenses is recorded on which side of cash book?
Receipts
Payments
Income
Expense
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