Accounting MCQs / Q&A

Which of these transactions will not be recorded in cash book?

A. Cash received from debtors
B. Cash paid to creditors
C. Salary remained outstanding
D. Cash deposited with bank

In a three column cash book_______________does not exist?

A. Cash column
B. Bank column
C. Petty cash column
D. Discount column

Cash book records?

A. Only cash sales
B. All types of cash receipts and payments
C. Only revenue receipts
D. Only capital receipts

Any gain on the sale of non-current assets should be _________ from the net profit and the loss must be _________to the net profit in determining fund from operation?

A. Added, Reduced
B. Added, Added
C. Deducted, Added
D. Deducted, Deducted

Which of the following is an one sided error?

A. 500 purchase of old equipment not recorded in the books of A/c at all
B. 500 being expense on travelling expense credited to travelling expenses
C. Both
D. None

Which of the following error is an error of principle

A. 5,000 received from Sham credited to Ram A/c
B. 5,000 incurred on installation of new plant debited to travelling expenses A/c
C. 500 paid for wages debited to salary A/c
D. 500 being purchase of raw material debited to purchase A/c ` 50

Which of these errors affect two or more accounts

A. Errors of complete omission
B. Errors of principle
C. Errors of posting to wrong account
D. All the three

Which of these errors affect only one account?

A. Errors of casting
B. Errors of carry forward
C. Errors of posting
D. All the three

Which of the following enhances the earning capacity of an asset?

A. Increase in working capacity of an asset
B. Reduction in operating costs
C. Replacing damaged parts of an asset
D. Both A. and C. above

Enhancement of earning capacity can be by way of replacement of worn out or damaged parts which retarded the earning capacity and increase in the working capacity increases the earning capacity of the asset.

Which one of the following is a capital expenditure?

A. Compensation paid to Directors on termination of their services
B. Expenditure incurred in connection with the renewal of a Trade Mark.
C. Gratuities paid to Directors on termination of their services.
D. Royalty paid in installments for the purchase of rights to manufacture and sell patient medicines.