Basic Accounting 12

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Objective Questions and Answers of MBA: Basic Accounting 12

Subject: Objective Questions and Answers of MBA: Basic Accounting 12

Part 12: Objective questions and answers of Basic Accounting


Q1. Under which concept it is assumed that the enterprises has neither the intention nor the necessity of liquidation or of curtailing materiality the scale of operation

a) Revenue realization concept

b) Matching cost concept

c) Going concern concept

d) None of these


Q2. Journal Entries are known as book of ______________ Entry.

a) Original

b) Duplicate

c) Personal

d) Nominal


Q3. The allocation of owner's private expenses to his/her business violates which of the following?

a) Accrual concept

b) Matching concept

c) Separate business entity concept

d) Consistency concept


Q4. Book keeping is mainly concerned with

a) Recording of financial data relating to business operation

b) Designing the systems in recording classifying, summarizing the recorded data

c) Interpreting the data for internal and external users


Q5. The amount brought in by the proprietor in the business should be credited to

a) Cash a/c

b) Capital a/c

c) Drawing a/c

d) Bank a/c


Q6. Sales made by Mahesh for cash should be debited to

a) Cash a/c

b) Mahesh a/c

c) Sales a/c

d) Sales return a/c


Q7. Which of the following statements are false?

a) All liability is a debt for your business

b) Debtor are a asset for business

c) The accounting equation shows how much of your assets belong to the owner, and how much belong to people outside business

d) None of the above


Q8. A business has the following items in it:

Owners’ equity Rs.6,00, 000.

Liabilities Rs.14,00,000.

What is the value of Assets ______________ 

what is the valve of owner’s equity?

a) 600,000

b) 1,400,000

c) 2,000,000

d) None of these


Q9. A business has following items in it Land?

Vehicles Rs.600,000

Debtors Rs. 1,20,000

Cash Rs.30,000

Owners’ Equity Rs.1,000,000

Loan 5,00,000

Creditors Rs.50,000

What is the value of the land ______________

a) 1,000,000

b) 1,550,000

c) 800,000

d) None of these


Q10. Contingent liabilities should be recorded in the accounts when:

a) It is probable that the future event will occur.

b) The amount of the liability can be reasonably estimated.

c) Both (a) and b.

d) Either (a) or b.


Q11. Retained earnings statement depicts:

a) Appropriation of profits

b) Estimates of profits

c) Estimates of costs


Q12. Financial account record only

a) Actual figures

b) Budgeted figures

c) Standard figures

d) Management Figure


Q13. Depreciation is a ______________

a) Cash operating expenditure

b) Non cash operating expenditure

c) Cash non-operating expenditure

d) Non cash non-operating expenditure


Q14. The work of factory employees that can be physically associated with converting raw material into finished goods is classified as ––

a) Manufacturing overhead

b) Indirect materials

c) Indirect labour

d) Direct labour


Q15. Aggregate of prime cost and Factory overhead is known as:

a) Work on cost

b) Work Cost

c) Cost of Production

d) Direct Cost


Q16. All costs other than direct materials cost, direct labour cost and direct expenses are known as:

a) Indirect material cost

b) Overhead

c) Indirect labour cost

d) Indirect expenses


Q17. Amount of salary paid to Suresh should be debited to ______________

a) Account of Suresh

b) Salaries account

c) Cash account

d) Outstanding expenses


Q18. If a company has contingent liabilities, they appear in the ______________

a) Balance Sheet

b) Director’s Report

c) Foot note down the balance sheet

d) Chairman’s report


Q19. Financial account state the ______________ position of a concern.

a) Financial

b) Economic

c) Non-financial

d) None of these


Q20. Process that involves decision making with respect to investment in fixed asset

a) Valuation

b) Breakeven analysis

c) Capital budgeting

d) Material management decision


Part 12: Objective questions and answers of Basic Accounting


Q1. Answer c


Q2. Answer a


Q3. Answer c


Q4. Answer a


Q5. Answer b


Q6. Answer a


Q7. Answer d


Q8. Answer c


Q9. Answer c


Q10. Answer c


Q11. Answer a


Q12. Answer a


Q13. Answer b


Q14. Answer d


Q15. Answer b


Q16. Answer b


Q17. Answer b


Q18. Answer a


Q19. Answer a


Q20. Answer c

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