Basic Accounting 3

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Objective Questions and Answers of MBA: Basic Accounting 3

Subject: Objective Questions and Answers of MBA: Basic Accounting 3

Part 3: Objective questions and answers of Basic Accounting

 

Q1. Which of the following is a liability?

a) Loan from Mr. y

b) Loan to Mr. y

c) Both (a), (b)

d) None of these

 

Q2. Which of the following best describes a trial balance?

a) It is a list of balances on the books

b) It is a special account

c) Shows the financial position of a business

d) Shows all the entries in the books

 

Q3. The prime function of accounting is to

a) To record economic data

b) Provide the information basis of action

c) Classifying and recording business transaction

d) Attainment of economic goal

 

Q4. Carriage outward is charged to

a) Debit side profit & loss a/c

b) Debit side trading a/c

c) Credit side of profit & loss a/c

d) Credit side of trading a/c

 

Q5. Accounting does not record non-financial transactions because of:

a) Accrual concept

b) Cost concept

c) Continuity concept

d) Money measurement concept

 

Q6. Creating provision against fluctuation in the price of investment is application of accounting concept

a) Convention of conservatism

b) Convention of full disclosure

c) Convention of consistency

d) None of these

 

Q7. The following comments each relate to the recording of journal entries. Which statement is true?

a) For any given journal entry, debits must exceed credits.

b) It is customary to record credits on the left and debits on the right.

c) The chart of accounts reveals the amount to debit and credit to the affected accounts.

d) Journalization is the process of converting transactions and events into debit/credit format.

 

Q8. Management accounting relates to

a) Recording of accounting data

b) Recording of cost data

c) Presentation of account data

d) None of the above

 

Q9. Which of the following is not related with money measurement concept ?

a) All business transaction should be expressed only in money

b) The transactions which cannot be expressed in money, will not be recorded in accounting books

c) Business is treated as separate from the proprietor

d) None of these

 

Q10. Fixed assets and current assets are categorized as per concept of:

a) Separate entity

b) Going concern

c) Consistency

d) Time period

 

Q11. Insurance prepaid is shown as

a) Current assets

b) Current liabilities

c) Fixed asset

d) Fixed liability

 

Q12. Goods given as samples should be credited to:

a) Advertisement account

b) Sales account

c) Purchase account

d) None of the above

 

Q13. Sales made to Mahesh for cash should be debited to

a) Cash account

b) Mahesh account

c) Sales account

d) Purchase account

 

Q14. What comes in is to be debited, what goes out is to be credited.

a) Rules of personal

b) Rules of real

c) Rules of nominal

d) All of these

 

Q15. Payment received from debtor

a) Decreases the total assets

b) Increases the total assets

c) Results in no change in the total assets

d) Increases the total liabilities

 

Q16. Carriage outward is charged to

a) Debit side profit & loss a/c

b) Debit side trading a/c

c) Credit side of profit & loss a/c

d) Credit side of trading a/c

 

Q17. Outstanding expenses are charged to

a) Asset side of balance sheet

b) Liability side of balance sheet

c) Not charged to balance sheet

d) None of these

 

Q18. The revenue recognition principal dictates that all types of incomes should be recorded or recognized when

a) Cash is received

b) At the end of accounting period

c) When they are earned

d) When interest is paid

 

Q19. ______________ System records only actual cash receipts and payments

a) Cash basis

b) Accrual basis

c) Mercantile basis

d) Single entry basis

 

Q20. Cost accounting emerged mainly on account of:

a) Statutory requirements

b) Competition in the market

c) Labour unrest

d) Limitations of financial accounting

 

Part 3: Objective questions and answers of Basic Accounting

 

Q1. Answer a

 

Q2. Answer a

 

Q3. Answer c

 

Q4. Answer a

 

Q5. Answer d

 

Q6. Answer a

 

Q7. Answer d

 

Q8. Answer c

 

Q9. Answer b

 

Q10. Answer b

 

Q11. Answer a

 

Q12. Answer c

 

Q13. Answer a

 

Q14. Answer b

 

Q15. Answer c

 

Q16. Answer a

 

Q17. Answer b

 

Q18. Answer c

 

Q19. Answer b

 

Q20. Answer d

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