Question:

The debts written off earlier as bad, subsequently recovered are

A.

Debited to profit and loss A/c

B.

Credited to bad debt recovery A/c

C.

Credited to trade receivable A/c

D.

Credited to debtors A/c

Answer» b. Credited to bad debt recovery A/c

Question:

Whenever errors are noticed in the accounting records, they should be rectified.

A.

at the time of preparation of Trial Balance.

B.

without waiting the accounting year to end.

C.

after the preparation of final accounts.

D.

in the next accounting year.

Answer» b. without waiting the accounting year to end.

Question:

Accounting does not record non-financial transactions because of

A.

Entity concept

B.

Accrual concept

C.

Cost concept

D.

Money measurement concept

Answer» a. Entity concept

Question:

If a sum of 1,500 received from Laxman (debtor) has not been recorded in the books, the

A.

Profit would show an increase of 1,500

B.

Profit would show a decrease of 1,500

C.

Assets would show a decrease of 1,500

D.

None of the above

Answer» d. None of the above

Question:

Goods taken from business for personal use by the proprietor should be credited to

A.

Drawing a/c

B.

Capital a/c

C.

Sales a/c

D.

Purchase a/c

Answer» d. Purchase a/c

Question:

Narration is given at the end of

A.

Final accounts

B.

Trial balance

C.

Each ledger account

D.

Each journal entry

Answer» d. Each journal entry

Question:

The periodical total of Returns Inward Day Book is posted to 5

A.

Debit of Sales Account

B.

Debit of Sales Return Account

C.

Credit of Sales Return Account

D.

Debit of Debtors Account

Answer» b. Debit of Sales Return Account

Question:

________________________is not objective of accounting.

A.

Gives accurate information

B.

Keeps records in systematic manner

C.

Analyses recorded data

D.

Ascertain financial position of business

Answer» a. Gives accurate information

Question:

Income tax of the sole trade paid is shown

A.

Debited to P & L Account

B.

Debited to Trading Account

C.

Debited to his Capital Account

D.

None of the above

Answer» c. Debited to his Capital Account

Question:

An expenditure is capital in nature when

A.

The receiver of the amount is going to treat it for the purchase of fixed assets.

B.

It increases the quantity of fixed assets.

C.

It is paid as interest on loans for the business.

D.

It maintains of fixed asset.

Answer» b. It increases the quantity of fixed assets.