Basic Accounting 20

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Objective Questions and Answers of MBA: Basic Accounting 20

Subject: Objective Questions and Answers of MBA: Basic Accounting 20

Part 20: Objective questions and answers of Basic Accounting

 

Q1.The credit entry for net profit is on the credit side of:

a) The trading account

b) The drawings account

c) The capital account

d) The profit and loss account

 

Q2. The total of the Sales Journal is entered on:

a) The debit side of the Sales Account in the General Ledger

b) The credit side of the General Account in the Sales Ledger

c) The credit side of the Sales Account in the General Ledger

d) The debit side of the Sales Day Book

 

Q3. When the final accounts are prepared, the Bad Debts Account is closed by a transfer to the:

a) Trading Account

b) Provision for Doubtful Debts Account

c) Balance Sheet

d) Profit and Loss Account

 

Q4. A Bank Reconciliation Statement is a statement:

a) Sent by the bank when we have made an error

b) Drawn up by the bank to verify the cash book

c) Sent by the bank when the account is overdrawn

d) Drawn up by us to verify our cash book balance with the bank statement balance

 

Q5. If a trial balance totals do not agree, the difference must be entered in:

a) The Profit and Loss Account

b) A Nominal Account

c) The Capital Account

d) A Suspense Account

 

Q6. Given opening capital of £16,500, closing capital as £11,350 and drawings were £3,300, then:

a) Profit for the year was £8,450

b) Loss for the year was £8,450

c) Profit for the year was £1,850

d) Loss for the year was £1,850

 

Q7. Assets can be revalued in a partnership change because:

a) The depreciation charged on them needs to be reversed

b) It helps prevent injustice to some partners

c) The law insists upon it

d) Inflation affects all values

 

Q8. Carriage inwards is charged to the trading account because:

a) Carriage outwards goes in the profit and loss account

b) It is an expense connected with buying goods

c) It is not part of motor expenses

d) It should not go in the balance sheet

 

Q9. £50 cash taken from the cash till and banked is entered:

a) Debit cash column £50: Credit bank column £50

b) Debit bank column £50: Credit bank column £50

c) Debit bank column £50: Credit cash column £50

d) Debit cash column £50: Credit cash column £50

 

Q10. A firm bought a machine for £16,000. It is expected to be used for 5 years then sold for £1,000. What is the annual amount of depreciation if the straight line method is used?

a) £3,750

b) £3,100

c) £3,200

d) £3,000

 

Q11. When banking money in to your current account you should always use:

a) A general ledger

b) A cheque book

c) A cash book

d) A paying-in slip

 

Q12. Depreciation is:

a) The salvage value of a fixed asset

b) The amount of money spent in replacing assets

c) The part of the cost of the fixed asset consumed during its period of use by the firm

d) The amount spent to buy a fixed asset

 

Q13. Capital Expenditure is:

a) The costs of running the business on a day-to-day basis

b) Money spent on buying fixed assets or adding value to them

c) Money spent on selling fixed assets

d) The extra capital paid in by the proprietor

 

Q14. When a petty cash book is kept there will be:

a) No entries made at all in the general ledger for items paid by petty cash

b) The same number of entries in the general ledger

c) Fewer entries made in the general ledger

d) More entries made in the general ledger

 

Q15. Given cost of goods sold £16,000 and margin of 20 per cent, then sales figure is:

a) £21,000

b) £20,000

c) £13,600

d) £20,160

 

Q16. In the Manufacturing Account is calculated:

a) The production costs paid in the year

b) The total cost of goods produced

c) The gross profit on goods sold

d) The production cost of goods completed in the period

 

Q17. Is it true that the trial balance totals should agree?

a) No, there are sometimes good reasons why they differ

b) Yes, always

c) Yes, except where the trial balance is extracted at the year end

d) No, because it is not a balance sheet

 

Q18. Suppliers' personal accounts are found in the:

a) Sales ledger

b) Nominal ledger

c) Purchases ledger

d) General ledger

 

Q19. The total of the 'Discounts Allowed' column in the Cash Book is posted to:

a) The debit of the Discounts Received account

b) The debit of the Discounts Allowed account

c) The credit of the Discounts Allowed account

d) The credit of the Discounts Received account

 

Q20. The total of the Purchases Journal is transferred to the:

a) Credit side of the Purchases Account

b) Credit side of the Purchases Book

c) Debit side of the Purchases Account

d) Debit side of the Purchases Day Book

 

Part 20: Objective questions and answers of Basic Accounting

 

Q1. Answer c

 

Q2. Answer c

 

Q3. Answer d

 

Q4. Answer d

 

Q5. Answer d

 

Q6. Answer d

 

Q7. Answer b

 

Q8. Answer b

 

Q9. Answer c

 

Q10. Answer d

 

Q11. Answer d

 

Q12. Answer c

 

Q13. Answer b

 

Q14. Answer c

 

Q15. Answer b

 

Q16. Answer d

 

Q17. Answer b

 

Q18. Answer c

 

Q19. Answer b

 

Q20. Answer c

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