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1)
The accounting process involves in recording:

A) Quantifiable economic event
B) Non quantifiable economic event
C) All of them
D) None of them
2)
In accounting an Economic event is referred to as:
A) Cash
B) Bank statement
C) Transaction
D) Exchange of money
1)
The Basic accounting equation is
A) Asset=Expense +Income
B) Assets=Cash+Capital
C) Assets=Capital+Liabilities
D) Assets=Expenses+Capital
2)
Find out the value of assets if: Liabilities=$5000 and Capital=$1000
A) $4000
B) $6000
C) $7000
D) $3000
1)
The process of recording is done
A) Two times a year
B) once a year
C) Frequently during the accounting period
D) At the end of a accounting period
2)
General journal is a book of _______ entries
A) First
B) Original
C) Secondary
D) Generic
1)
Which of the following specialised journals records "goods returned by customers"?
A) Purchase journal
B) Sales journal
C) Purchases return journal
D) Sales return journal
2)
Sales on credit is recorded in which of the following journal?
A) Purchase journal
B) Sales journal
C) Purchases return journal
D) Sales return journal
1)
Transferring entries from journal to ledger account is commonly known as
A) Recording
B) Transferring
C) Posting
D) Entry making
2)
An account records the ___________ in the balance of an item
A) Increase
B) Decrease
C) Increase or decrease
D) Appreciation
1)
Trial balance is prepared to check accuracy of
A) Ledger accounts balances
B) Balance sheet balances
C) Income statement balances

D) Cash flow statement balances
2)
If a transaction is completely omitted from the books of accounts, will it affect the agreement of a trial
balance?
A) Yes
B) No
C) Transactions can't be omitted
1)
The closing balance of petty cash book is considered as
A) Liability
B) Asset
C) Expenses
D) Income
2)
Payment of rent expenses is recorded on which side of cash book?
A) Receipts
B) Payments
C) Income
D) Expense
1)
Favourable balance of cash book implies that
A) Credit balance of cash book
B) Debit balance of cash book
C) Bank overdraft
D) Adjusted balance of cash book
2)
A cash deposit made by business appears on the bank statement as _______ balance
A) Debit
B) Credit
C) Expenses
D) Liability
1)
Accrued expenses are considered as
A) Asset
B) Liability
C) Gain
D) Income
2)
Prepaid expenses are regarded as
A) Asset
B) Liability
C) Loss
D) Capital
1)
Which of the following is not regarded as the fundamental concept that is identified by IAS-1
A) The going concern concept
B) The septate entity concept
C) The prudence concept
D) Correction concept
2)
Using "lower of cost and net realisable value" for the purpose of inventory valuation is the
implementation of which of the following concepts?
A) The going concern concept
B) The septate entity concept
C) The prudence concept
D) Matching concept
1)
Financial statements are prepared mainly for
A) Internal users of financial information
B) External users of financial informaiton
C) Creditors of the business
D) Managers of the busienss
2)
Net profit is computed in which of the following?
A) Balance sheet
B) Income statement
C) Cash flow statement
D) Statement of changes in equity
1)
What is the minimum number of partners required to commence a partnership business?
A) 20
B) 10
C) 2
D) 4
2)
Partnership type of business is formed by the mutual agreement of partners. What kind of
agreement is it?
A) Oral agreement
B) Written agreement
C) Oral or written agreement
D) None of them
1)
Which of the following is another term for debtor control account?
A) Sales account
B) Receivable account
C) Creditor control account
D) Sales ledger control account
2)
Control accounts are most commonly used for which of the following purposes?
A) Preparing cash flow statement
B) Making entries in other accounts
C) Accumulating the total balances of related accounts
D) Detecting errors in accounting records
1)
What is depreciation?
A) Cost of a fixed asset
B) Cost of a fixed assets repair
C) The residual value of a fixed asset
D) Portion of a fixed assets cost consumed during the current accounting period
2)
Under which depreciation method the amount of depreciation expenses remains same
throughout the useful life of a fixed asset
A) Straight line method
B) Reducing balance method
C) Number of units produced method
D) Machine hours method
1)
Which of the following is the effect on net income if a business decreases provision for
doubtful debts?
A) It will increase net income
B) It will decrease net income
C) No effect
D) It will increase gross profit and net income
2)
A firm has not recorded the bad debts by mistake. Which of the following is the effect of bad
debts omission?
A) Net profit would decrease
B) Net profit would increase
C) Gross profit would overstate
D) Gross profit would understate
1)
The value of inventories or stock is figured out at the lower of cost and
A) purchase price
B) opportunity cost
C) realizable value
D) net realizable value
2)
An overstatement in the value of closing stock overstates all of the following except
A) Net income
B) Current assets
C) Capital of the business
D) Cost of goods sold
1)
Which of the following is generally considered as a non profit oriented organization?
A) Charitable organization
B) Corporation
C) Audit firms
D) Insurance companies
2)
The receipts and payments account of a non-profit organization is a
A) Nominal account
B) Real account
C) Income statement account
D) Financial statement
1)
In single entry system of accounting
A) Dual aspects of a transaction is recorded
B) Single aspect of a transaction is recorded
C) Important transactions are recorded
D) All of them
2)
Statement of financial position produced from incomplete accounting record is commonly
known as
A) Balance sheet
B) Cash flow statement
C) Statement of affairs
D) Statement of financial operations

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1)

The accounting process involves in recording:

C) Income statement balances

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