Basic Accounting 22

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Objective Questions and Answers of MBA: Basic Accounting 22

Subject: Objective Questions and Answers of MBA: Basic Accounting 22

Part 22: Objective questions and answers of Basic Accounting


Q1. If £500 was shown added to Purchases instead of being added to a fixed asset:

a) Net profit only would be overstated

b) Both gross and net profits would be understated

c) Net profit only would be understated

d) It would not affect net profit


Q2. Errors are corrected via the Journal because:

a) It saves the bookkeeper's time

b) It provides a good record explaining the double entry records

c) It saves entering them in the ledger

d) It is much easier to do


Q3. Prime cost includes:

(i) Direct labour

(ii) Factory overhead expenses

(iii) Raw materials consumed

(vi) Direct expenses

a) (i), (iii) and (iv)

b) (i), (ii) and (iii)

c) (ii), (iii) and (iv)

d) (i), (ii) and (iv)


Q4. Net profit is calculated in the:

a) Profit and loss account

b) Balance sheet

c) Trial balance

d) Trading account


Q5. If you want to make sure that your money will be safe if Cheques sent are lost in the post, you should:

a) Always pay by cash

b) Cross your Cheques 'Account Payee only, Not Negotiable'

c) Always take the money in person

d) Not use the postal service in future


Q6. A cash discount is best described as a reduction in the sum to be paid:

a) If payment is made by cash, not cheque

b) If purchases are made for cash, not on credit

c) If payment is made either by cash or cheque

d) If payment is made within a previously agreed period


Q7. The total of the Returns Outwards Journal is transferred to:

a) The debit side of the Returns Outwards Account

b) The credit side of the Returns Outwards Book

c) The credit side of the Returns Outwards Account

d) The debit side of the Purchases Returns Book


Q8. A debit balance brought down on a Packing Materials Account means:

a) We have a stock of packing materials unused

b) We are owed for packing materials

c) We have lost money on packing materials

d) We owe for packing materials


Q9. ______________ the transactions is known as Book Keeping.

a) Classifyi

b) Recordi

c) Summarisi

d) None of the


Q10. The credit balance of bank account indicates ______________

a) amount payable by the bank

b) amount payable to the bank

c) cash at bank

d) loan from bank


Q11. Depreciation is provided on ______________

a) working capita

b) current asset

c) fixed asset

d) intangible assets


Q12. At the time of endorsement of a bill, the drawer credits ______________

a) the .drawee

b) endorsees personal account

c) bills receivable account

d) bills for collection account


Q13. In accounting the benefit receiving aspect is said to be

a) Debi

b) Credi

c) Debit and Credi

d) none of these


Q14. The excess of current assets over current liabilities is called ______________.

a) Net tangible worth

b) Networth

c) Gross working capital

d) Net working capital


Q15. Bank Reconciliation statement is ______________

a) ledger account

b) part of the cash book

c) separate statement

d) a sub division of the journal


Q16. If payment is made on the average due date it results in ______________

a) loss of interest to the creditor

b) loss of interest to the debtor

c) no loss of interest to either of them

d) loss of interest to both the creditor and debtor


Q17. Purchases for office furniture on account is recorded in ______________.

a) general journal

b) cash book

c) purchases book

d) sales book


Q18. The following items are shown in profit and loss appropriation account ______________

a) Dividend declared

b) Discount on issue of shares

c) Non-operating expenses

d) Current assets


Q19. Receipts and payment account record receipt and payments of ______________.

a) revenue nature only

b) capital nature only

c) both revenue and capital nature

d) capital receipts


Q20. Any revenue expense for when a separate fund is available will be ______________.

a) debited to the separate fund

b) debited to income and expenditure account

c) capital issued and shown in the balance sheet

d) credited to the separate fund


Part 22: Objective questions and answers of Basic Accounting


Q1. Answer b


Q2. Answer b


Q3. Answer a


Q4. Answer a


Q5. Answer b


Q6. Answer d


Q7. Answer c


Q8. Answer a


Q9. Answer b


Q10. Answer b


Q11. Answer c


Q12. Answer c


Q13. Answer a


Q14. Answer c


Q15. Answer c


Q16. Answer c


Q17. Answer b


Q18. Answer a


Q19. Answer c


Q20. Answer a

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