Gupta's Classes
Accounting
McQs Chapter - 1(Ncert Based)
Introduction to Accounting
Q. 1 Which is the evidence of business transaction?
A Voucher
B Balance sheet
C Journal
D Ledger
E More than one
Q. 2 Posting of entries in the ledger is done from?
A Vouchers
B Subsidiary books
C Journal
D None of these
E More than one
Q. 3 What type of transactions we record in the books of accounts?
A Cash nature
B Financial nature
C Both A and B
D monetary nature
E More than one
Q. 4 What accounting method is followed for the recording of transactions?
A Cash Basis System
B None of them
C Double Entry System
D Single entry system
E More than one
Q. 5 Which one is not the step of accounting
A Interpretation
B Classifying the recorded entries
C Window Dressing
D Recording in the book of accounts
E More than one
Q. 6 Which of the following does not represents a business transactions?
A Efficiency of Management
B Goods are sold on credit
C Assets sold and money introduced in business
D company hosting charity event and donation
E More than one
Q. 7 The main purpose of balance sheet is to show
A Financial Position
B Creditors
C Assets and Capital
D Old Accounting Records
E More than one
Q. 8 The objective of financial accounting is to ascertain for a particular period
A Assets only
B Debt only
C Accounts
D Profit/Loss
E More than one
Q. 9 Accounting is helpful in replacing the................
A Money
B Material
C Memory
D Method
E More than one
Q. 10 The person from whom goods are purchased on credit is known as
A Debtor
B Investors
C Supplier
D Creditor
E More than one
Q. 11 A firm earns revenue of Rs. 14,500 and to earn this revenue the firm incurs an expense
of Rs.8,500. Calculate firm's income.
A Rs.5, 500
B Rs.6, 000
C Rs. 7, 500
D Rs.5, 000
E More than one
Q. 12 A person who receives benefit without paying money immediately but liable to pay in
future within a particular period of time is known to be as...........
A Creditor
B Borrower
C Debtor
D Investor
E More than one
Q. 13 The expenditure incurred at the time of acquiring any assets or improving the quality
of any existing assets which will help in increasing the earning capacity of the business is
called..........
A Deferred Revenue Expenditure
B Capital Expenditure
C Revenue Expenditure
D Operational Expenses
E More than one
Q. 14 Which of the following uses accounting information to take policy decisions?
A Creditors
B Investors and potential investors
C Government authorities
D Banks and financial institutions
E More than one
Q. 15 Which of the following transaction is maintained in a systematic manner?
A Monetary
B Non-monetary
C Managerial
D Financial
E More than one
Q. 16 What is the first step of accounting process?
A Identifying the business transaction
B Classifying the transaction under separate heads in the ledger
C Recording transaction in the books
D Communicating the information to the various parties who are interested in business
enterprise
E More than one
Q. 17 Who is not an internal user of accounting?
A Owner
B Management
C Employees
D Investors
E More than one
Q. 18 The branch of accounting which keeps a systematic record of financial transactions
and represents the operating result of the organisation is.....
A Management accounting
B Financial accounting
C Social responsibility accounting
D Cost accounting
E More than one
Q. 19 Accounting is an art as well as
A Finance
B Commerce
C Profession
D Science
E More than one
Q.20 Which one of the following is not a function of accounting?
A Meeting legal requirements
B Maintaining systematic record
C Communicating the financial results
D Reliability of the accounting
E More than one
Q. 21 The business organisation whose revenue is in excess of its expenses is known as...........
A Profit
B Sales
C Loss
D Gain
E More than one
Q. 22 Which one of the following is the correct sequence of accounting process?
A Identification, classification, measurement and communication
B Analysis, interpretation, measurement, identification and recording
C Classification, recording, analysis, interpretation and communication
D Identification, recording, D classification, analysis and interpretation
E More than one
Q. 23 Trade payables include which of the following?
A Creditor and bills payable
B Creditor and bills receivable
C Debtor and bills receivable
D Debtor and bills payable
E More than one
Q. 24 In a non-profit organisation, surplus or deficit is shown by which type of accounting
information?
A Profit and loss account
B Trading account
C Income and expenditure account
D Receipt Account
E More than one
Q. 25 Which one of the following transaction is not recorded in the books of account?
A Paid sons fees Rs. 10,000 to University of Mumbai from his personal account
B Purchased raw material from the supplier Rs. 12,000
C Personal selling made by a salesman worth Rs. 25000
D Paid salary to employees Rs. 15,000
E More than one
Q. 26 Which of the following is not an intangible asset?
A Trademark
B Copyright
C Goodwill
D Computer
E More than one
Q. 27 Which of the following transaction is not of financial nature?
A Strike by employees
B Paid rent for office premise
C Withdraw money from business for personal use
D Purchase of machinery
E More than one
Q. 28 Which one of the following is not a characteristic of accounting information?
A Comparability
B Reliability
C Transparency
D Record keeping
E More than one
Q. 29 A transaction can be recorded in the books of account only if the transaction is of
an/a............. nature.
A Scientific
B Economic
C Financial
D Social
E More than one
Q. 30 The asset which does not have physical existence is known as
A Current Assets
B Intangible Assets
C Tangible Assets
D Fictitious Assets
E More than one
Q. 31 The main purpose of accounting is to give a...................view of accounting.
A True and Fair
B Unfair
C Inadequate
D Biased
E More than one
Q. 32 Where.............ends............begins
A Accounting and Book keeping
B Book keeping and Accounting
C Finance and Accounting
D Accounting and Auditing
E More than one
Q. 33 Goods/Assets or Cash used for personal use by a businessman is called_
A Profit
B Investment
C Capital
D Drawings
E More than one
Q. 34 The objective of financial accounting is to ascertain..........at a particular date.
A Profit/Loss
B Financial position
C Both A and B
D Assets only
E More than one
Q. 35 Book keeping is mainly concern with
A Interpreting data for internal and external users
B Recording financial data relating to business operations and classifying it.
C Designing for system recording, classifying and summarizing
D All of these
Q. 36 Which is the last step of accounting as a process of information
A Communication of information
B Preparation of financial transaction
C Analysis of information
D Interpretation of Accounting information
E More than one
Q. 37 Posting of entries in the ledger is done from
A Balance sheet
B Journal
C Vouchers
D Journal Proper
E More than one
Q. 38 Sales is also known as
A Turnover
B Revenue from operations
C Cost of goods sold
D Income
E More than one
Q. 39 ...........users are the groups outside the business entity who uses the information to
make decisions about the business entity
A Internal
B External
C Both A and B
D Investors
E More than one
Q. 40 Which of the following is a limitation of accounting?
A Evidence in court
B Replacing Memory
C Facilitates loan
D Window Dressing
E More than one
Q. 41 Following information is related to Trade discount except
A encourage the debtors to pay the dues promptly
B Persuade the buyer to buy more goods
C Offered at an agreed percentage
D Not recorded in the books
E More than one
Q. 42 A company prepares statement of Profit and Loss in the form prescribed in the
companies act
A 1950
B 2013
C 1945
D 1932
E More than one
Q. 43 A liability is a current liability if it satisfies........
A It is due to settled within 12 months after reporting date
B It is expected to be settled in the company's normal operating cycle
C It is held primarily for the purpose of being traded
D It is due to settled after 12 months after reporting date
E More than one
Q. 44 Which of the following will not fall under Current liability?
A It is due to settled within 12 months after reporting date
B It is expected to be settled in the company's normal operating cycle
C It is held primarily for the purpose of being traded
D It is due to settled after 12 months after reporting date
E More than one
Q. 45 The time between the acquisition of an asset for processing and its conversion into
cash and cash equivalent is called
A Operating cycle
B Time gap
C Production cycle
D None of these
E More than one
Q. 46 Which one of the following is not a fictitious asset?
A Loss on issue of debentures
B Goodwill
C Deferred revenue expenditure
D Discount on issue of shares
E More than one
Q. 47 The expense that has been incurred but has not been paid are called-
A Outstanding expenses
B Prepaid expenses
C Revenue
D Loss
E More than one
Q. 48 Debtors and Bills Receivable are shown as..........
A Trade Payables
B Cheques in hand
C Trade Receivables
D None of these
E More than one
Q. 49 The person who makes the investment and bears all the risks connected with the
business is called..........
A Debenture holder
B Debtor
C Proprietor
D Entrepreneur
E More than one
Q. 50 Which one of the following is not a current liability?
A Debentures
B Creditors
C Bill payables
D Short term loan
E More than one
Q.51 Expenditure on purchase of machinery is a
A Capital expenditure
B Revenue expenditure
C Deferred revenue expenditure
D None of these
E More than one
Q. 52 Amount paid in advance for a particulars expenses is known as........
A Prepaid expense
B Outstanding expense
C Both
D None
E More than one
Q. 53 Debit is same as........
A. Debito in Italian
B. Debita in Latin
C. Debeo in Latin
D Both B and C
E More than one
Q. 54 Credit is same as......
A. Credito in Italian
B. Credo in Latin
C Credere in Spanish
D Both B and C
E More than one
Q. 55 Which of the following is an Internal transaction or event?
A. Payment of wages to Employees
B Payment of monthly rent to the landlord
C Sale of merchandise to the Customers
D Supply of raw material by the stores department to the manufacturing department
E More than one
Q. 56 Which of the following statements were likely to be true about Accounting?
A. Accounting was First recognised/developed from Babylonia around 4000 B.C.
B Accounting was recognised in China around 2000 B. C.
C The credit of developing accounting practices goes to Kautilya from Chandragupta's
kingdom
D Both B and C
E More than one
Q. 57 Which of the following statement is not an objective of accounting?
A To maintain records of business
B To provide information on about B the enterprise's assets, liabilities and capital
C To provide information on about the personal assets, liabilities and capital of the owner
D To provide information on the performance of the enterprise
Q. 58 The information provided in the annual financial statement do not include..........
A Information of personal assets of owner
B Profits or loss made during the year
C Balance sheet
D None of these
E More than one
Q. 59 Which of the following can be considered as a business transaction?
A Goods are purchased on credit
B Salary paid to an employee
C Appointment of an efficient Manager
D Personal assets sold by owner
E More than one
Q. 60 Identified and measured accounting events should be recorded in which order
A Chronological order
B Sequential
C Horizontal
D Any order
E More than one
Q. 61 Which stakeholder would be most interested in the VAT and other tax liabilities of the
firm?
A Social responsibility groups
B Government and other regulators
C Management
D None of these
E More than one
Q. 62 Which stakeholder would be most interested in the earning capacity of a business
firm?
A Suppliers
B Government and other regulators
C Customers
D Investors
E More than one
Q. 63 Which stakeholder would be most interested in the ethical or environmental activities
of the firm?
A Social responsibility groups
B Government and other regulators
C Management
D Suppliers
E More than one
Q. 64 Which stakeholder would be most interested in whether the firm has a long-term
future?
A Government and other regulators
B Management
C Lenders
D Suppliers
E More than one
Q. 65 Which stakeholder would be most interested in profitability and share performance?
A Government and other regulators
B Social responsibility groups
C Management
D owner and share holders.
E More than one
Q. 66 Which qualitative characteristic of accounting information is reflected when
accounting information is clearly presented?
A Comparability
B Understandability
C Reliability
D Relevance
E More than one
Q. 67 When both aspects of a transaction are recorded, it is known as:
A Double Entry System
B Single Entry System
C Bahi Khata System
D None of these
E More than one
Q. 68 ............is a post mortem of past costs.
A Financial accounting
B Cost accounting
C Both A and B
D Management accounting
Q. 69 In the following which is not the branch of Accounting?
A Statistics
B Financial Accounting
C Management Accounting
D Cost Accounting
E More than one
Q. 70 The main function of Accounting is :
A Reliability
B Comparability
C Recording and classification of financial transactions
D Calculation of Profit and Loss only
E More than one
Q. 71 Capital is the money invested by :
A Proprietor
B Creditors
C Bank
D Entrepreneur
E More than one
Q. 72 Which of the following is long term liability?
A Outstanding expense
B Bills payable
C Creditors
D Debentures
E More than one
Q. 73 Which of the following is an intangible asset ?
A Machinery
B Patents
C Geographical Indication
D trademarks
