Basic Accounting 5

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Objective Questions and Answers of MBA: Basic Accounting 5

Subject: Objective Questions and Answers of MBA: Basic Accounting 5

Part 5: Objective questions and answers of Basic Accounting


Q1. Purchases of goods on credit from a/c  is recorded as:

a) Debit purchases a/c; credit cash a/c

b) Debit a a/c; credit purchases a/c

c) Debit purchases a/c; credit a a/c

d) Debit a a/c; credit stock a/c


Q2. The following comments all relate to the recording process. Which of these statements is correct?

a) The general ledger is a chronological record of transactions.

b) The general ledger is posted from transactions recorded in the general journal.

c) The trial balance provides the primary source document for recording transactions into the general journal.

d) Transposition is the transfer of information from the general journal to the general ledger.


Q3. Information about an item is ______________ if its omission or misstatement might influence the financial decision of the users taken on the basis of that information

a) Concrete

b) Complete

c) Immaterial

d) Material


Q4. Cost of goods sold= opening stock+ net purchases+ expenses on purchases – sales which part of formula is wrong?

a) Opening stock

b) Net purchases

c) Expenses on purchases

d) Sales


Q5. All those to whom business owes money are:

a) Debtors

b) Investors

c) Creditors

d) Shareholders


Q6. Trade payables are recorded in ______________

a) Asset side of b/s

b) Liability side of b/s

c) P & l a/c

d) None of the above


Q7. Payment received from debtor:

a) Decreases the total assets

b) Increases the total assets

c) Results in no change in total assets

d) Increase the total liabilities


Q8. The term management accounting was first used in

a) 1910

b) 1939

c) 1950

d) 1960


Q9. The primary objective of management accounting is

a) Prepare final a/c

b) Provide management complete and true information

c) Both (a)& (b)

d) None of these


Q10. The basic concepts related to p& l a/c are:

a) Realization concept

b) Matching concept

c) Cost concept

d) Both a and b above


Q11. Credit balance of profit & loss a/c shown on

a) Asset side of balance sheet

b) Liability side of balance sheet

c) Not shown in balance sheet

d) Half on asset side and half on liability side


Q12. Cost accounting information can be used for:

a) Budget control and evaluation.

b) Determining standard costs and variances.

c) Pricing and inventory valuation decisions.

d) All of these


Q13. If loan have been guaranteed by managers and directors is called as

a) Loan

b) Unsecured loan

c) Secured loan

d) Advance by manager & director


Q14. Authorized capital, also known as

a) Ominal capital

b) Paid-up capital

c) Issues capital

d) None of these


Q15. 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


Q16. The aggregate of direct costs is known as:

a) Direct material costs

b) Direct wages

c) Direct expenses

d) Prime cost


Q17. Proposed dividends (is shown in the balance sheet of a company under the head:

a) Provisions

b) Reserves and surplus

c) Current liabilities

d) Other liabilities


Q18. Interest on drawings is:

a) Expenditure for the business

b) Cost for the business

c) Gain for the business

d) None of the above


Q19. Opening stock + ______________ + direct expenses (carriage on raw material) closing stock = ______________

a) Sales, purchases

b) Sales, sales return

c) Purchases, cost of goods produced

d) Purchases, cost of goods sold


Q20. 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


Part 5: Objective questions and answers of Basic Accounting


Q1. Answer c


Q2. Answer b


Q3. Answer d


Q4. Answer d


Q5. Answer c


Q6. Answer b


Q7. Answer c


Q8. Answer c


Q9. Answer b


Q10. Answer d


Q11. Answer b


Q12. Answer d


Q13. Answer c


Q14. Answer a


Q15. Answer a


Q16. Answer d


Q17. Answer a


Q18. Answer c


Q19. Answer c


Q20. Answer a

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