BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

ACCOUNTING CONCEPTS & CONVENTIONS Q1} XYZ Ltd. Purchased goods for `. 25,00,000 and sold 80% of such goods during the accounting year ended 31st March, 2005. The market value of the remaining goods was `.4,00,000. The company valued the closing stock at cost. They violated the concept of (a) Conservatism (b) Money measurement (c) Periodicity (d) Cost Q2} Profit and Loss Account is prepared for a period of one year by following (a) Periodicity period concept (b) Business entity concept (c) Accrual concept (d) None of the above Q3} Basic concepts related to balance sheet are (a) Conservatism concept (b) Business entity concept (c) Going concern concept (d) Both (b) or (c) Q4} What is the important object of accounting? (a) To maintain records (b) Depiction of financial position (c) Make information available to various groups & users (d) All of the above Q5} Income is measured on the basis of (a) Matching concept (b) Consistency concept (c) Cost concept (d) None of the above Q6} The enterprise is liable to the owner for capital investment made by the owner as per (a) Entity concept (b) Money measurement concept (c) Accrual concept (d) Going concern concept Q7} Inventories are valued at lower of cost or net realizable value by applying the principle of (a) Conservatism (b) Consistency (c) Materiality (d) Disclosure Q8} In which area different accounting policies are adopted (a) Valuation of inventories (b) Valuation of investment (c) Depreciation (d) All of the above Q9} Advance received from Debtors is not taken as Sales is based on (a) Conservatism concept (b) Accrual concept (c) Money measurement concept (d) None of the above Q10} Mohan purchased a Motor Car costing `.60,000 on 1st January, 2006 transportation and repairing charge were incurred amounting `.5,000 and 200 respectively. Dismantling charge of old motor car in place of which new motor car was purchased amounted to `.20,000. Marked value of motor car was estimated at `.70,000 and 31st December, 2006 while finalizing the annual accounts. Mohan values the motor car at `.70,000 in this book. Which of the following concepts was violated by the Mohan? (a) Matching concept (b) Realization concept (c) Cost concept (d) Periodicity concept Q11} Fundamental accounting assumptions are (a) Consistency concept (b) Going concern concept (c) Accrual concept (d) All of the above 1 Q12} Arjun purchased goods for `.10,00,000 and sold 70% of such goods during the year ended 31st Dec. 2006. The market value of the remaining goods was 2,00,000. He valued the closing stock at cost. He violated the concept of (a) Periodicity (b) Money measurement (c) Conservatism (d) Cost Q13} All the following items are classified as fundamental accounting assumptions except (a) Consistency (b) Business entity (c) Going concern (d) Accrual Q14} Two primary qualitative characteristics of financial statements are (a) Understandability and materiality (b) Relevance and reliability (c) Relevance and understandability (d) Materiality and reliability Q15} Kanika Enterprises follows the written down value method of depreciating machinery year after year due to (a) Comparability (b) Convenience (c) consistency (d) All of the above Q16} Assets are held in the business for the purpose of (a) Resale (b) Conversion into cash (c) Earning revenue (d) None of the above Q17} Revenue from sale of products, is generally, realized in the period in which (a) Cash is collected (b) Sale is made

BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

(c) Products are manufactured (d) None of the above Q18} The concept of conservatism when applied to the balance sheet results in (a) Understatement of assets (b) Overstatement of assets (c) Overstatement of capital (d) Understatement of capital Q19} The determination of expenses for an accounting period is based on the principle of (a) Objectivity (b) Materiality (c) Matching (d) Periodicity Q20} Economic life of an enterprise is split into the periodic interval as per (a) Periodicity (b) Matching (c) Going concern (d) Accrual Q21} If an individual asset is increased, there will be a corresponding (a) Increase of another asset or increase of capital (b) Decrease of another asset or increase of liability (c) Decrease of specific liability or decrease of capital (d) None of the these Q22} Financial position of the business is ascertained on the basis of (a) Records prepared under book keeping process (b) Trial balance (c) Accounting reports (d) None of the above Q23} User of accounting information include (a) Creditors (b) Lenders (c) Customers (d) All of the above Q24} It is on the basis of the entity co9ncept that money brought by the proprietor into the business is credit to ____________ account. (a) Proprietors personal (b) Proprietors capital (c) Cash A/c (d) Bank A/c Q25} As per the going concern concept until and unless the business has entered into a state of liquidation, it is viewed as having ________ life. (a) Definite (b) Indefinite (c) Standstill (d) None Q26} A businessman needs to know the state of affairs of his business at frequent intervals which is normally a twelve-month period this period is called _______ year. (a) Accounting (b) Calendar (c) Financial year (d) Leap year. Q27} ______ basis of revenue recognition considers the revenue as realized when sale is completed. (a) Cash (b) Sales (c) Mercantile (d) None of these Q28} In determining net income from business operation, the losses not related to ordinary business operation are ______ from the revenue for determining net income. (a) deducted (b) not deducted (c) added 2 (d) none of these Q29} According to the convention of conservatism, the stock in trade is valued at market price, or cost price, whichever is _____ (a) Less (b) More (c) Same (d) None Q30} The principle of accountancy, which recognizes the double aspect of a business transaction is knows are _______ concept. (a) Dual (b) Accrual (c) Matching (d) Entity Q31} The system of recording transactions based on dual concept is called(a) Double account system (b) Double entry system (c) Single entry system (d) Cash system Q32} According to money measurement concept the following on dual concept is called (a) Health of the chairman of the company (b) Quality control in the business (c) Value of the building (d) Staff morale Q33} Cost concept envisages the recording of the following in the books of accounts (a) An asset at its cost (b) Knowledge and will acquired by business executive (c) Changes effected because of some political events (d) Qualification C/F/O. (Chief Financial officer) Q34} The practice of appending note regarding contingent liabilities in the accounting statements is in pursuant to

BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

(a) Conventio0n of Consistency (b) Money measurement concept (c) Convention of disclosure (d) Entity concept Q35} The Proprietor is treated as a creditor to the extent of his capital according to (a) Cost concept (b) Business entity concept (c) Going concern concept (d) Dual concept Q36} The accounting equation is based on (a) Going concern concept (b) Dual aspect concept (c) Money measurement concept (d) Entity concept Q37} Market value of investments is shown as a footnote according to (a) Convention of disclosure (b) Convention of consistency (c) Convention of conservatism (d) Entity concept Q38} Making the provision for doubtful debts in anticipation of actual bad debts is on the basis of (a) Convention of disclosure (b) Convention of consistency (c) Convention of conservatism (d) Dual Concept Q39} According to going concern concept, a Business is viewed as having (a) A limited life (b) An indefinite life (c) A very long life (d) No life Q40} Contingent liability is shown due to (a) Convention of full disclosure (b) Convention of conservatism (c) Convention of materiality (d) Dual aspect concept Q41} Depreciation was not recorded because to do so would result in a net loss for the period Indicate the accounting principle that is violated (a) Cost Principle (b) Consistency (c) Materiality (d) No principle of accounting is violated Q42} LIFO inventory method was used in year 1, FIFO in year 2 and weighed average in year 3. Which accounting principle is violated? (a) Cost Principle (b) Consistency (c) Materiality (d) No principle of accounting is violated Q43.} The owner of a company included his personal medical expenses in the companys income statements. Indicate the accounting principle that is violated. (a) Cost principle (b) Going concern concept (c) Entity concept (d) Conservatism Q.44.} Land was reported as its selling prince which is substantially higher than its cost. The increase in value was included in the income statement. Which accounting principle is violated? (a) Cost principle (b) Going concern concept (c) Entity concept (d) Conservatism Q.45} No mention was made of a major law suit filed against the company even though the companys attorney believes that there is high probability of losing the case. Indicate the accounting principle that is violated. (a) Cost principle (b) Conservatism (c) Full disclosure 3 (d) Materiality Q.46} The cost of three small files (of `.4 each) was charged to expenses when purchased even though they had a useful life of several years. This was done according to the a) Cost principle b) Conservatism principle c) Full disclosure d) Materiality Q.47) An accounting convention which provides that when doubt, choose the solution least likely to overstate assets and income is (a) Consistency (b) Materiality (c) Conservatism (d) Continuity Q.48) Money measurement concept of accounting theory is based on the assumption that the value of money will (a) Remain constant (b) Fluctuate (c) Decrease (d) Go up Q.49) The fundamental accounting equation Assets Liabilities is the formal expression of (a) Dual aspect concept (b) Matching concept (c) Going concern concept (d) Money measurement concept Q.50) Any change in the accounting policy relating to inventories which has a material effect in the current or late, periods should be disclosed. This is in accordance with the accounting principle of : (a) Going concern (b) Conservatism (c) Consistency (d) Disclosure

BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

Q.51) Assets in the balance sheet are shown at cost less depreciation rather than their replacement cost because of the accounting convention. (a) Going concern (b) Matching (c) Realization (d) Money Measurement Q.52) The assets are classified as current assets and fixed assets in accordance with____ (a) Accounting period assumption (b) Matching principle (c) Consistency principle (d) Going concern principle Q.53) Materiality principle is an exception to the ___ (a) Consistency principle (b) Accounting period assumption (c) Prudence principle (d) Full disclosure principle Q.54) When stock is valued at cost in one accounting period and at lower at cost and net reliable value in another accounting period _____ (a) Prudence principle conflicts with consistency principle (b) Matching principle conflicts with consistency principle (c) Consistency principle conflicts with Accounting period assumption (d) None of the above Q.55) Accrual means _________ (a) Recognition of revenue as it is earned and of costs as they are paid (b) Recognition of revenue as it is received and of costs as they are incurred (c) Recognition of revenue and costs on payment basis (d) Recognition of revenue as it is earned and of costs as they are incurred. Q.56) prudence principle is as exception to the _____ (a) Matching principle (b) Going concern assumption (c) Conservatism (d) Consistency Q.57) The assets and incomes are not overstated and the liabilities and losses are not understated in accordance with _________ (a) Cost concept (b) Going concern assumption (c) Matching principle (d) Prudence principle Q.58) Prudence is a concept to recognize _____ (a) All losses and not profits (b) Unrealized profits and not losses (c) Realized losses and not profits (d) None of the above Q.59) Accounting of a small calculator as an expenses & not as an asset is in accordance with _____ (a) Full disclosure principle (b) Objective principle (c) Accounting period assumption (d) None of the above Q.60) Mr. X started business on 1st April, 2001 and reported about the financial performance and financial position of the business on 31st March, 2007 being the date of liquidation of enterprise. He has violated____ (a) Money measurement principle (b) Periodicity principle (c) Consistency principle (d) Accounting entity principle Q.61) The principle which treats all rupees alike whether it is a rupee of 1957 or 2007 ____ (a) Money measurement principle (b) Periodicity principle 4 (c) Consistency principle (d) Accounting entity principle Q.62) Mr. X valued the inventory on FIFO basis and LIFO basis during 2006 and 2007 respectively. He has violated_______ (a) Conservation principle (b) Materiality principle (c) Cost principle (d) Consistency principle Q.63) Mr. X has a sundry debtors of `.1,00,000. Creating a provision for discount @ 2% on sundry debtors is in accordance with_________ (a) Conservatism principle (b) Materiality principle (c) Cost principle (d) Consistency principle Q.64) Mr. X has a sundry creditors of `. 1,00,000 crediting a reserve for discount @ 2% on sundry creditors is violation of _______ (a) Conservatism principle (b) Materiality principle (c) Cost principle (d) Consistency principle Q.65) The production manager reports to the top management that production for the year 2007 is 200 tons but actual production is 1,99,000.90 kilogram. He has followed ____ (a) Conservatism principle (b) Materiality principle (c) Cost principle (d) Consistency Q.66) Mr. X purchased a building for `.1,00,000 but at the end of accounting period, the market value of building is `.1,50,000. He disclosed the building at `.1,50,000 in the financial statements. He has violated _____ (a) Conservatism principle (b) Materiality principle

BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

(c) Cost principle (b) Credited (d) Consistency (c) Deducted Q.67) The concept which calls for adjustment to be (d) Added made in respect of prepaid and outstanding Q.6) Trade discount is recorded by expenses and accrued and accrued revenue is _____ (a) Buyer (a) Prudence principle (b) Seller (b) Accrual principle (c) Customer (c) Cost principle (d) None (d) consistency Q.7) In case of a debt becoming bad, the amount Q.68) GAAPs are : should be credited to (a) Generally Accepted Accounting Policies (a) Debtors account (b) Generally Accepted Accounting Principles (b) Bad debts account (c) Generally Accepted Accounting Provisions (c) Cash account (d) None of these (d) Sales account Q.8) Which one of the following is an example of JOURNAL personal accounts ? Q.1) Journal records the transactions of the firm in : (a) Capital account (a) At least one account (b) Building account (b) At least two accounts (c) Cash account (c) Maximum of two accounts (d) Investment account (d) Maximum of three accounts Q.9) Which of the following is a real account? Q.2) A business transaction affects (a) Salaries (a) At least one account (b) Investments in shares (b) At least two accounts (c) Debtors account (c) Maximum of two accounts (d) Bank account (d) Maximum of three accounts Q.10) Provision for doubtful debts accounts is a Q.3) Journal is book of (a) Personal account (a) All cash transactions only (b) Real account (b) All credit transactions only (c) Nominal account (c) Secondary entry (d) None (d) Original entry Q.11) Wages account is a Q.4) The rent paid to landlord is credited to (a) Persona account (a) Landlords account (b) Real account (b) Rent account (c) Nominal account (c) Cash account (d) None (d) None of the above Q.12) Provision of Depreciation account is a Q.5) Trade discount is always (a) Personal account (a) Debited (b) Real account 5 (c) Nominal account (d) None Q.13) Prepaid insurance account is (a) An expense (b) An Income (c) An asset (d) A liability Q.14) Professional fees (earned) account is likely to have (a) Only debit entries (b) Only credit entries (c) Both debit and credit entries (d) None Q.15) Bills receivable account (a) Personal account (b) Real account (c) Nominal account (d) Both a and b Q.16) Loan account is (a) Personal account (b) Real account (c) Nominal account (d) None Q.17) Loose tools is in the nature of. (a) Real A/c (b) Nominal A/c (c) Personal A/c (d) None Q.18) Sale of office furniture should be credited to (a) Sales A/c (b) Nominal A/c (c) Personal A/c (d) None Q.19) The debits written off as bad, if recovered subsequently are (a) Credited to bad debts recovered account (b) Credited to debtors account (c) Debited to profit and loss account

BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

(d) None of the above Q.27) Stock of `.4,000 is destroyed by fire. It was not Q.20) Bank overdraft account has a insured the accounting entry is (a) Debit balance (a) Loss by fire A/c Dr. 4,000 (b) Credit balance To Goods A/c (c) Debit or Credit balance 4,000 (d) none (b) Loss by fire A/c Dr. 4,000 Q.21) Bank overdraft account is a: To purchase A/c (a) personal account 4,000 (b) Real account (c) Loss by fire A/c Dr. 4,000 (c) Nominal account To Goods destroyed by fire A/c (d) None of the above 4,000 Q.22) DEBIT signifies : (d) All of the above (a) Increase in Assets account Q.28) Ramlal, a debtor of `. 2,000 became insolvent (b) Decrease in liability account and dividend of 50% is recovered by the official (c) Decrease in capital account receiver. The entry is (d) All of the above (a) Bad debt A/c Dr. 1,000 Q.23) Credit signifies To Debtors A/c (a) Increase 1,000 (b) Decrease (b) Bank A/c Dr. 1,000 (c) Either an increase or a decrease To Debtors A/c (d) None 1,000 Q.24) Bills payable is _______ (c) Bank A/c Dr. 1,000 (a) Personal A/c To Bad debts A/c (b) Real A/c 1,000 (c) Nominal A/c (d) Bank A/c Dr. 1,000 (d) None of the above Bad Debt A/c Dr. 1,000 Q.25) Cash accounts is_________ To Debtors A/c (a) Personal A/c 2,000 (b) Real A/c Q.29) Capital of business if `.75,000 and liability is (c) Nominal A/c `.25,000 then Assets of business would be : (d) None of the above (a) `.1,00,000 Q.26) Wages `.1,000 payable to labour will be (b) `.15,000 credited (c) `.75,000 (a) Cash A/c (d) `.50,000 (b) Labour A/c Q.30) The Installation expenses for a new machinery (c) Salary A/c will be credit to (d) None of the above (a) Cash A/c (b) Profit & Loss A/c 6 (c) Machinery A/c (d) Installation Expenses A/c Q.31) Goods worth `.5,000 given as charity should be credited to (a) Purchases A/c (b) Sales A/c (c) Capital A/c (d) None of the above Q.32) Sale of office furniture should be debited to (a) Furniture A/c (b) Sale A/c (c) Cash A/c (d) Purchase A/c Q.33) Loss leads to a reduction in (a) Capital (b) Income (c) Liabilities (d) None of the above Q.34) Purchase for cash (a) Increase liability (b) Decrease assets (c) No change in the total assets (d) Increase assets Q.35) Trade discount allowed at the time of sale of goods is (a) Recorded in Journal (b) Not recorded in book of accounts (c) Recorded in cash Book (d) Recorded in Sales book Q.36) Goods distributed as free samples is debited to (a) Advertisement A/c (b) Charity A/c (c) Income (d) Goods A/c Q.37) Drawing is a type of (a) Expenses (b) Withdrawal of capital (c) Income

BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

(d) None of the above Q.38) Purchase of office equipment on credit will lead to (a) Decrease in capital (b) Decrease in liability (c) Income in Assets (d) All of the above Q.39) Ram paid `.1,000 towards a debt of `.3,000 which was written off as bad debt in the previous year. Rams account will be credited with (a) `.1,000 (b) `.3,000 (c) `.2,500 (d) NIL Q.40) An old motor car was purchase for `.1,00,000. It was repaired for `.10,000 and `.15,000 spent on its painting. Repairs A/c will be debit by (a) `.1,25,000 (b) `.10,000 (c) `.15,000 (d) NIL Q.41) Material cost `.4,000 and labour charges `.3,000 paid for the erection of the building is debit to (a) Purchase A/c (b) Material A/c (c) Building A/c (d) Wages A/c Q.42) Sunset Tour has `.3,500. Account receivable from Mohan. On January 20, Mohan makes a partial payment of `.2,100 Sunset Tours. The Journal entry made on January 20 by Sunset Tours to record this transaction includes. (a) A credit to the cash received account of `.2,100 (b) A credit to the account receivable account of `.2,100 (c) A debit to the cash account `.1,400 (d) A debit to the account receivable account `.1,400 Q.43) Which of the followings is an accounting equation? (a) Capital = Asset + Liabilities (b) Capital = Assets - Liabilities (c) Assets = Liabilities + Capital (d) Liabilities = - Assets - Capital Q.44) An old furniture appearing in the books at `.10,000 is to be exchanged for a new furniture of `.10,000. The old furniture has been value at Purchase A/c `. 2,000 for exchange purpose. Loss on exchange will be (a) `.18,000 (b) `.22,000 (c) `.8,000 (d) `.7,000 Q.45) Journal entry for wages paid `.3,000 for installation of plant will be (a) Dr. Plant repair A/c and Cr. Cash A/c 3,000 (b) Dr. Wages A/c and Cr. Cash A/c 3,000 (c) Dr. Plant A/c and Cr. Cash A/c 3,000 (d) None of the above Q.46) Capital of business is `.50,000 and its liabilities are `.35,000. It assets will be (a) `.25,000 (b) `.85,000 (c) `.15,000 (d) `.75,000 Q.47) Assets of business are `.1,46,000 and its liabilities are `.27,000. Its capital will be (a) `.1,73,000 (b) `.1,19,000 (c) `.1,20,000 (d) `.1,15,000 Q.48) Purchase of goods on credit will (a) Increase Assets (b) Increase Liabilities 7 (c) Increase both Assets & Liabilities (d) Will not change value of Assets Q.49) Loan repaid `.10,000 will (a) Increase Assets by `.10,000 (b) Decrease Asset by `.10,000 (c) Decrease Liabilities by `.10,000 (d) Both b & c Q.50) Goodwill account is a (a) Personal accounts (b) Real accounts (c) Nominal accounts (d) None Q.51) Representative Personal Account includes (a) Individuals like Rohan, Mohan etc. (b) Societies, Clubs etc. (c) Outstanding, Prepaid etc. (d) None of the above Q.52) Relationship of Assets with liabilities & Capitl is known as (a) Double entry System (b) Traditional Approach (c) Accounting Equation Approach (d) None of the above Q.53) Net purchase means (a) Gross purchase before trade discount (b) Purchase less trade discount (c) Purchase less purchase returns (d) Purchase less cash discount Q.54) Traditional Approach follows: (a) Relationship of Assets with liabilities & capitla (b) Debit & Credit rule (c) Assets = Liabilities (d) None of the above Q.55) Decrease in assets leads to (a) Decrease in Liabilities (b) Increase in Assets (c) Increase in Liabilities

BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

(d) a or b Q.3) The process of transferring the transactions Q.56) Increase in Liabilities leads to relating to changes in a particular item at one place (a) Decrease is Assets in the form of an account is called__________ (b) Decrease in Liabilities (a) Balancing (c) Increase in Assets (b) Casting (d) b or c (c) Journalizing Q.57) Personal Account relates to (d) Posting (a) Persons Q.4) Ledger records transaction in : (b) Assets (a) A chronological order (c) Expenses & Incomes (b) Analytical order (d) None of the above (c) Both a & b Q.58) Real Account relates to (d) None (a) Persons Q.5) The miscellaneous expenses account is likely to (b) Assets have: (c) Expenses & Incomes (a) Only debit entries (d) None of the above (b) Only credit entries Q.59) Increase in Assets leads to (c) Both of above (a) Decrease in Liabilities (d) Initially only debit entries and subsequently (b) Increase in Assets credit entries (c) Increase in Liabilities Q.6) Discount allowed Account will always have: (d) a or b (a) Only debit balance Q.60) Decrease in Liabilities leads to (b) Nil balance (a) Decrease in Assets (c) Only credit balance (b) Decrease in Liabilities (d) Debit or Credit balance (c) Increase in Assets Q.7) The credit balance of personal account shows: (d) b or c (a) Cash in hand LEDGER (b) The amount payable Q.1) Ledger Book is popularly known as : (c) Income (a) Prime book of accounts (d) Amount receivable (b) Principal book of accounts Q.8) Which of these Account has debit balance: (c) Subsidiary book of accounts (a) Income received in advance (d) None (b) Bank loan Q.2) Which of following accounts may have a debit (c) Prepaid insurance premium or a credit balance? (d) Reserve for doubtful debts (a) Bank Acount Q.9) Cash Account is a: (b) Purchase Account (a) Personal account (c) Commission (Recd) Account (b) Real account (d) None (c) Nominal account 8 (d) None of these Q.10) The next step after preparation of Ledger is the preparation of ________ (a) Trial balance (b) Final accounts (c) Cash flow statement (d) Balance sheet Q.11) The process of transferring the debit and credit items from a journal to their respective account in the ledger is termed as (a) Posting (b) purchase (c) balancing of an a/c (d) arithmetically accuracy test Q.12) The technique of finding the net balance of an account after considering the totals of both debit and credits appearing in the account is known as (a) Posting (b) Purchase (c) Balancing of an account (d) Arithmetically accuracy test Q.13) Journal and ledger records transactions in (a) A chronological order and analytical order respectively (b) An analytical order chronological order respectively (c) A chronological order only (d) An analytical order only Q.14) Ledger book is known as (a) Prime book o entry (b) Personal book of entry (c) Secondary book of entry (d) None of the above Q.15) at the end of the accounting year all the nominal accounts of the ledger book are (a) Balance but not transferred to profit and loss account

BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

(b) Not balanced and also the balance is not transferred to the profit and loss account (c) Balanced and the balance is transferred to the balance sheet (d) Not balanced and their balance is transferred to the profit and loss account. Q.16) the credit balance in the bank account is (a) An asset (b) A liability (c) Capital (d) A revenue Q.17) Prepaid insurance account (a) Shows a debit balance (b) Shows a credit balance (c) May have either a debit balance or credit balance (d) none Q.18) Accounts receivable is likely to have (a) Debit balance (b) Credit balance (c) May have debit or credit balance (d) None Q.19) which of the following accounts is increased by debit entries? (a) Machinery account (b) Discount earned account (c) Purchase return account (d) All of these Q.20) which of the following accounts is decreased by debit entries? (a) Salaries account (b) Bank account (c) Owners equity account (d) All of these Q.21) which of the following accounts is increased by credit entries? (a) Sales return account (b) Bank overdraft (c) Goodwill account (d) Purchase account Q.22) Ledger is an accounting book in which (a) Only real accounts are opened (b) Only real and personal accounts are opened (c) All the real, personal and nominal accounts are opened (d) none Q.23) which of the followings is not a book of original entry? (a) Cash book (b) Ledger (c) Sales journal (d) Bills receivable book Q.24) Ledger is a principal book in which (a) All accounts are kept (b) Only personal accounts are kept (c) Only real accounts are kept (d) Only nominal accounts are kept Q.25) the process of transferring the credit and debit items from a journal to their respective account in the ledger is termed as (a) balancing (b) invoicing (c) double entry (d) posting Q.26) the bank account at the end of the financial year has a credit balance of `.56. What is the explanation for this unusual balance? (a) There must be un deposited cash in hand (b) There must be some error in recording (c) The cashier has manipulated cash (d) There is overdraft Q.27) Normally, the following accounts are balanced (a) Real A/c and Nominal A/c (b) Personal A/c and Real A/c (c) Only Nominal A/c (d) All accounts 9 Q.28) accounts payable has _____ balance (a) Credit (b) Unfavorable (c) Debit (d) Favorable Q.29) Accounts receivable normally has _____ balance (a) Credit (b) Debit (c) Unfavorable (d) None of the above Q.30) In case of credit balance the word _____ are written on the credit side. (a) By balance b/d (b) To balance b/d (c) By balance c/d (d) To balance c/d Q.31) Bill payable normally has (a) Credit balance (b) Debit balance (c) Unfavorable balance (d) Either (a) or (b) Q.32) Writing transaction in the Ledger is called (a) Casting (b) Balancing (c) Posting (d) Journalizing Q.33) In the ledger there are (a) 5 columns (b) 6 columns (c) 7 columns (d) 8 columns Q.34) The following account will have debit balance (a) Loan to other party (b) Capital A/c (c) Outstanding salary (d) Reserve for doubtful debts Q.35) Credit balance in the ledger will be

BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

(a) A revenue or an asset (b) A revenue or a liability (c) An expenses or an asset (d) None of the above Q.36) The debit balance of a personal account shows the (a) Amount of credit sales (b) Cash in hand (c) Amount payable to persons (d) Amount receivable from persons Q.37) In case of debit balance the word_____ are written on the debit side. (a) By balance b/d (b) To balance b/d (c) By balance /d (d) To balance c/d Q.38) To Balance c/d means (a) Opening Debit balance (b) Closing debit balance (c) Closing credit balance (d) Opening credit balance Q.39) Debit balance means (a) Debit side total is more than credit side (b) Credit side total is more than debit side (c) Both debit & credit totals are equal (d) None of the above Q.40) Credit balance means (a) Debit side total is more than credit side (b) Credit side total is more than debit side (c) Both debit & credit totals are equal (d) None of the above Q.41) Assets always have (a) Debit balance (b) Credit balance (c) Negative balance (d) Nil balance Q.42) Liabilities always have (a) Debit balance (b) Credit balance (d) Nil balance (c) Negative balance Q.50) Loan given always have (d) Nil balance (a) Debit balance Q.43) Expenses always have (b) Credit balance (a) Debit balance (c) Negative balance (b) Credit balance (d) Nil balance (c) Negative balance (d) Nil balance TRIAL BALANCE Q.44) Incomes always have Q.1) Methods of preparation of Trial balance are : (a) Debit balance (a) Net trial balance (b) Credit balance (b) Gross trial balance (c) Negative balance (c) Gross and Net trial balance method (d) Nil balance (d) All of these Q.45) Capital will always have Q.2) Trial balance is a : (a) Debit balance (a) Statement (b) Credit balance (b) Account (c) Negative balance (c) Summary (d) Nil balance (d) Ledger Q.46) Drawings will always have Q.3) The preparation of trial balance is for: (a) Debit balance (a) Locating errors of commission (b) Credit balance (b) Locating errors of principle (c) Negative balance (c) Locating clerical errors (d) Nil balance (d) All of the above Q.47) When debit total is equal to credit total the Q.4) Difference of totals of both debit and credit side account will have of trial balance is transferred to : (a) Debit balance (a) Trading account (b) Credit balance (b) Suspense account (c) Negative balance (c) Difference account (d) Nil balance (d) Miscellaneous account Q.48) Loan from Lender will have Q.5) Trial balance under balance method is known (a) Debit balance as: (b) Credit balance (a) Gross trial balance (c) Negative balance (b) Net trial balance (d) Nil balance (c) Simple trial balance Q.49) Loan to borrower will have (d) Trial balance appropriation (a) Debit balance Q.6) A trial balance contains the balance of : (b) Credit balance (a) Only personal and real accounts (c) Negative balance (b) Only real and nominal accounts 10

BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

(c) Only nominal and personal Accounts (d) All Accounts. Q.7) Trial balance is prepared on: (a) End of the year (b) A particular date (c) For the period ending____ (d) Both a and b Q.8) A trial balance will not balance if (a) Correct journal entry is posted twice (b) The purchase on credit basis is debited to purchases and credited to cash (c) `.500 cash payment to creditors is debited to creditors for `. 50 and credited to cash as `.500. (d) None of the above Q.9) `.1,500 received from sub-tenant for rent and entered correctly in the cash book is posted to the debit of the rent account. In the trial balance (a) The debit total will be greater by `.3,000 that the credit total (b) The debit total will be greater by `.1,500 that the credit total (c) Subject to other entries being correct the total will agree (d) None of the above Q.10) After the preparation of ledgers, the step is the preparation of (a) Trading accounts (b) Trial balance (c) Profit and Loss account (d) None of the above Q.11) After preparing the trial balance the accountant finds that the total of debit side is short by `.1500. this difference will be (a) Credited to suspense account (b) Debited to suspense account (c) Adjusted to any of the debit balance account (d) Adjusted to any of the credit balance (d) Discount account account Q.17) which of the following accounts may have a Q.12) debit or a credit balance? (a) Miscellaneous expenses account S. No. Account Heads Debit (`.) Credit (b) Current account of a partner (`.) (c) Purchase account 1. Sales 15,000 (d) Commission (received) account 2. Purchase 10,000 Q.18) Which item is shown on the debit side of a trial 3. Miscellaneous exp. 2,500 4. Salaries 2,500 balance? (a) Purchases returns Total 12,500 17,500 (b) Rent outstanding The difference in trial balance is due to (c) Prepaid Expenses (a) Wrong placing of sales account (d) Pre-received commission (b) Wrong placing of salaries account Q.19) The amount listed for cash in the trial balance (c) Wrong placing of miscellaneous exp. account represents (d) Wrong placing of all account (a) Cash receipts during the period Q.13) In case a trial balance does not agree the (b) Cash disbursements during the period difference is put to (c) Cash receipts minus disbursements during (a) Trading accounts the period (b) Profit and Loss account trial Balance (d) The balance of cash on the date of trial (c) Capital account balance (d) Suspense account Q.20)Miscellaneous expenses account is likely to Q.14) Trial balance is a have (a) Final accounts (a) Debit balance (b) Statement of assets and liabilities (b) Credit balance (c) Subsidiary book (c) Debit or credit (d) Statement of ledger A/c balances (d) None Q.15) Which of the following accounts will invariably Q.21)Which of the following accounts have only have a debit balance? credit balance? (a) Accounts receivable / Debtors (a) Reserve fund account (b) Accounts payable / Creditors (b) Capital account (c) Current account of a partner (c) Accounts payable (d) Bank account (d) All of these Q.16) Which of the follo0wing account will in have a Q.22) The main purpose of preparing a trial balance credit balance? is (a) Current account of the proprietor (a) To prepare a summary of all the balances (b) Accounts receivable (b) To compare the debit balances with credit (c) Accounts payable balances 11

BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

(c) To locate all types of errors (d) To check the arithmetic accuracy of the ledger accounts Q.23) what do you mean by Gross trial balance? (a) Only debit side total is considered (b) Only credit side total is considered (c) Both the debit and credit side totals are considered (d) Difference between the debit side and credit side total is considered Q.24) What do you mean by Net trial balance? (a) Purchases of sales are considered after Returns (b) Debtors are considered after RDD (c) Difference between the debit and credit side total is considered (d) Both the debit and credit side totals are considered Q.25) Trial balance is prepared to ensure (a) All transactions are recorded (b) Both the effects of a transaction are recorded (c) No frauds have been made (d) Whether the transactions recorded are arithmetically correct Q.26)Expenses will have (a) Debit balance (b) Credit balance (c) Positive balance (d) Negative balance Q.27) Incomes will have (a) Debit balance (b) Nil balance (c) Credit balance (d) None of the above Q.28) Return outwards will have (a) Debit balance (b) Credit balance (c) Nil balance (d) None of the above Q.29) Outstanding expenses and income received in advance will have a credit balance because it is (a) Money receivable (b) Money payable (c) Next year expense (d) Current years expense Q.30) If trial balance tallies it means (a) All transactions have been recorded (b) Both the effects of the transactions are correctly recorded (c) No error exists (d) Some errors may exist Q.31) Purchase returns of `.1000 was posted to debit of sales returns A/c and correctly credited to partly. Due to this: (a) Debit side of Trial balance will be more by `.1000 (b) Credit side of Trial balance will be more by `.1000 (c) Debit side of Trial balance will be more by `.2000 (d) credit side of Trial balance will be more by `.2000 Q.32) Rent paid `.10,000 not recorded. Due to this (a) Debit side of T.B. will be less by `.10000 (b) Debit side of T.B. will be more by `.10000 (c) There will be no effect on T.B. (d) None of the above. Q.33) Sales of 2000 on credit was posted as `.200. Due to this (a) Debit side of T.B. will be less by `.1800 (b) Credit side of T.B. will be more by `.1800 (c) Both a or b (d) There will be no effect on T.B. Q.34) Difference in Trial Balance will be (a) Debited to suspense A/c 12 (b) Credited to suspense A/c (c) Transferred to suspense (d) None of the above Q.35) Trial balance is prepared to (a) Find the profit (b) Find the financial position (c) Check Arithmetical accuracy (d) None of the above SUBSIDIARY BOOK Q.1) The total of purchase day book is posted periodically to the: (a) Debit of purchase A/c (b) Credit purchase A/c (c) Cash Book (d) None of these Q.2) Total of the sales book for March indicates : (a) Total sales for the month (b) Total Credit sales for the month (c) Total cash sales for the month (d) Total sales less sales return Q.3) Goods sold for cash `.10,000 plus 10% sales tax, Sales A/c will be credit by: (a) `.11,000 (b) `.10,000 (c) `.9,000 (d) None Q.4) Purchase book is used to record: (a) All purchase of goods (b) All credit purchases (c) All credit purchase of goods (d) All credit purchases of assets Q.5) A_______ is sent to a customer when he return goods: (a) Debit note (b) Credit note (c) Proforma invoice (d) Non of the above

BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

Q.6) Purchase of fixed assets on credit basis is recorded in : (a) Purchase book (b) Cash book (c) Journal proper (d) Journal Q.7) The source document or voucher used for recording entries in sales book is : (a) Invoice received (b) Invoice sent out (c) Credit notes sent out (d) Debit notes received Q.8) Trade discounts are: (a) Records in the books (b) Not recorded in the books (c) Not used for determining the net price (d) Used for specific purpose in accounting Q.9) Total of sales book will be posted: (a) On debit side of sales account (b) ON credit side of purchases account (c) ON credit side of sales account (d) On debit side of sales return account Q.10) A note sent by buyer on return of goods is : (a) Debit note (b) Credit note (c) Return note (d) None Q.11) Bills receivable book is a part of (a) Ledger (b) Journal (c) Balance sheet (d) None of these Q.12) Purchase of office furniture on account is recorded in (a) Purchase book (b) Journal proper (c) Cash Book (d) Petty cash book Q.13) While posting the purchase book (a) Only the total of the purchases book is posted to the debit of purchases account (b) Only the accounts of the suppliers are credited with the amounts appearing against their respective names (c) The accounts of the suppliers are debited as well as the total of the purchases book is posted to the credit of the purchases account. (d) The total of the purchases book is posted to the debit of purchases A/c as well as the accounts of individual suppliers are credited with the amounts appearing against their names. Q.14) Returns inward from Rahim is entered in (a) Sales return book (b) Purchases return book (c) Journal (d) Sales book Q.15) Returned goods to Bajaj and Co. is recorded in (a) Purchases return book (b) Sales return book (c) Journal (d) Purchase book Q.16)Sales on account is recorded in: (a) Cash book (b) Sales book (c) Journal (d) Sales return book Q.17) Purchase of Electric kettles on account by Electric appliance Co. is recorded in (a) Journal (b) Purchase book (c) Cash book (d) Purchase return book Q.18) In order to determine the amount of sales, to which of the following records one should refer? 13 (a) Sales book (b) Sales account (c) Journal (d) Total Debtors account Q.19) Which of the following books would be used to record purchase of goods on account? (a) Cash book (b) Purchase book (c) Sales book (d) Journal Q.20) Which of the following books should be used to record purchase of merchandise on account? (a) Cash book (b) Purchase book (c) Sales Book (d) Journal Q.21) Journal proper is used to record (a) All purchase of goods (b) All sales of goods (c) All business expenses paid in cash (d) All adjusting and rectification entries Q.22) The sales Day-book is a part of the. (a) Journal (b) Trial balance (c) Ledger (d) Final account Q.23) Purchases book records all credit purchase of (a) Goods (b) Assets (c) Stationery (d) None Q.24) Which one of the following entry is not recorded in the journal (a) Opening entry (b) Closing entry (c) Adjustment entry (d) Credit sales Q.25) Bills payable book is a

BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

(a) Subsidiary book (b) Principal book (c) Ledger (d) Memorandum book Q.26) Posting is done from (a) One subsidiary to another (b) Ledger to subsidiary book (c) Subsidiary to ledger (d) Leger to ledger Q.27) The purchase Day book is a part of the. (a) Journal (b) Balance sheet (c) Ledger (d) Cash flow statement Q.28) The debit note issued are used to prepare (a) Sales return book (b) Purchase return book (c) Sales book (d) Purchase book Q.29) A debit note for `.2,000 issued to Mr. F for goods returned by us is to be accounted for (a) Bills Receivable book (b) Purchase book (c) Journal proper (d) Purchase return book Q.30) Purchase day book records: (a) All cash purchases (b) All credit purchases (c) Credit purchases of goods in trade (d) None of the above Q.31) Goods withdrawn for personal use will be recorded in (a) Purchase book (b) Sales book (c) Return outward book (d) Journal proper Q.32) Sales of machinery for cash will be recorded in (a) Cash book (b) Sales book (c) Journal proper (d) None. Q.33) Spot purchase of goods of `. 10,000 will be recorded in (a) Purchase book (b) Journal proper (c) Cash book (d) Returns inward book Q.34) Computer repairs payable to Arvind will be recorded in (a) Cash book (b) Journal proper (c) Return Inward book (d) None. Q.35) Appointment of typist on a monthly salary of `.5,000 p.m. will be recorded in (a) Cash book (b) Journal proper (c) Petty cash book (d) None. Q.36) Credit note is used to record (a) Purchase book (b) Sales book (c) Return Inward book (d) Return outward book Q.37) Inward invoice is used to record (a) Purchase book (b) Sales book (c) Return Inward book (d) Return outward book Q.38) Outward invoice is used to record (a) Purchase book (b) Sales book (c) Return Inward book (d) Return outward book Q.39) Which accounting entry is to be made for issuing a purchase order for `.9,000 to K. Verma? 14 (a) Purchase A/c Dr. 9,000 To Cash A/c 9,000 (b) Purchase A/c Dr. 9,000 To K.verma A/c 9,000 (c) Purchase A/c Dr. 9,000 To K.verma A/c 9,000 (d) None Q.40) goods previously ordered from K.verma were delivered and an invoice for `.9,000 (a) Goods A/c Dr. 9,000 To K.verm A/c 9,000 (b) Invoice A/c Dr. 9,000 To K.verma A/c 9,000 (c) Goods A/c Dr. 9,000 To Cash A/c 9,000 (d) Purchase A/c Dr. 9,000 To K.verma A/c 9,000 Q.41) What is the accounting entry for a cheques issued for `.8,820 to K.verma for full settlement of account of `.9,000 (a) K.verme A/c Dr. 8,820 To Bank A/c 8,820 (b) K.verma A/c Dr. 9,000 To Bank A/c 9,000 (c) K.verma A/c Dr. 9,000 To Bank A/c 9,000 (d) None of these Q.42) Which of the following books should be used to record purchase of a typewriter on A/c? (a) Cash books (b) Purchase book (c) Sales book (d) Journal proper Q.43) Which of the following books should be used to record an adjusting entry for depreciation? (a) Cash book (b) Sales book (c) Purchase book

BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

(d) Journal proper Q.44) Which of the following is recorded in the journal? (a) Paid bills payable by cheques (b) Depreciation provided on plant and machinery (c) Purchased machinery on cash basis (d) Sold old furniture of `.500 and cheque received in payment Q.45) The appropriate books to record credit purchase of Machinery is (a) Purchase book (b) Journal proper (c) Cash book (d) Petty cash book Q.46) Opening and closing entries are recorded in: (a) Journal proper (b) Purchase book (c) Sales book (d) Bill receivable book Q.47) A debit note for . 500 issued by Mr. Marshall to Mr. Fisher for goods returned by Mr. Marshall is to be accounted for (a) Bill receivable book (b) Purchase return book (c) Purchase book (d) Journal proper Q.48) When the goods are returned to a supplier (a) A debit note is sent to him (b) An account sale is sent to him (c) Purchase book (d) Journal proper Q.49) Credit purchase of cotton by dealer worth `.10,000 will be entered in (a) Sales book (b) Bill receivable book (c) Purchase book (d) None of the above Q.50) The monthly total of the purchase book is (a) Posted to the debit of the purchase A/c (b) Posted to the credit of the purchase A/c (c) Posted to the credit of bill payable A/c (d) None of the above Q.51) _____ recorded in purchase book (a) Credit purchase of goods dealt in by firm (b) Cash purchases of goods dealt in by firm (c) All purchases of goods dealt in by firm. (d) None of the above Q.52) Return Inward books records_____ (a) Purchase returns (b) Sales returns (c) Cash sales returns (d) Bill receivable book Q.53) Credit purchases of goods worth `.30,000 by a dealer will be recorded in (a) Cash book (b) Journal proper (c) Sales book (d) Purchase book Q.54) Returns of cash sales is recorded in (a) Purchase book (b) Sales book (c) Cash book (d) Sales returns book Q.55) Total of sales book is posted periodically to credit of (a) Journal proper (b) Purchase book (c) Sales account (d) Cash book Q.56) Ram motors will debit purchases of motor in (a) Motor A/c (b) Purchase A/c (c) General expenses A/c (d) None of the above Q.57) Purchase of Plant & Machinery on credit basis is recorded in (a) Cash book (b) Journal proper (c) Purchases (d) Both (a) and (b) CASH BOOK & PETTY CASH BOOK Q.1) The balance of petty cash is: (a) An expense (b) Revenue (c) An asset (d) Liability Q.2) Small payments are recorded in a book called: (a) Cash book (b) Small payments book (c) Purchase book (d) Petty cash book Q.3) Petty cash system is designed (a) To meet the needs of small businesses (b) To cover small and miscellaneous income (c) To cover the small expenditure to be paid in cash (d) To cover both small incomes and expenditures Q.4) The Imprest system is used in relation to (a) Purchases book (b) Sales book (c) Cash book (d) Petty cash book Q.5) in petty cash boo, the system followed is: (a) Accrual system (b) Imprest system (c) Cash system (d) None of these Q.6) On 1st Sept. 2008, a petty cash fund is established for `.250. the accounting entry is (a) Petty cash A/c Dr. 250

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BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

To cash A/c 250 (b) Cash A/c Dr. 250 To Bank A/c 250 (c) Cash A/c Dr. 250 To petty cash A/c 250 (d) No entry is required. Q.7) cash book is in a form of: (a) Trial balance (b) Ledger (c) Journal (d) All of the above Q.8) If the debit and credit aspects of a transaction are recorded in the cash book it is a: (a) Contra entry (b) Simple entry (c) Double entry (d) Single entry Q.9) Cheques received but deposited on the next day are recorded in: (a) Cash column of the cash book (b) Bank column of the cash book (c) Both of these (d) None of these Q.10) Double entry in cash book is completed when: (a) Salaries are paid by cheque (b) Withdrawal of money from bank for personal use (c) Deposited cash into bank (d) None of these. Q.11) The total of discounts column on the debit side of the cash book, recording cash discount deducted by customers when paying their accounts, is posted to the (a) Credit of the discount allowed account (b) Debit of the discount received account (c) Credit of the discount received account (d) Debit of the discount allowed account Q.12) Which of the following is the kind of a cash book? (a) Simple column cash book (b) Double column cash book (c) Three column cash book (d) All of the above Q.13) Cash book is a type of ____ but treated as a ___ of accounts. (a) Subsidiary book, principal book (b) Principal book, subsidiary book (c) Subsidiary book, Subsidiary book (d) Principal book, Principal book Q.14) which of the following is not a column of a three column cash book? (a) Cash column (b) Bank column (c) Petty cash column (d) Discount column Q.15) Salaries due for the month of March will appear (a) On the receipt side of the cash book (b) On the payment side of the cash book (c) As a contra entry (d) Nowhere in the cash book Q.16) Contra entries are passed only when (a) Double column book is prepared (b) Three column cash book is prepared (c) Simple cash book is prepared (d) None of the above Q.17) Purchase of machinery for business on cash is recorded in (a) Purchase journal (b) General journal (c) Cash book (d) Purchase return journal Q.18) A three columnar cash book records (a) All cash transactions only (b) Both cash and bank transactions excepting discounts (c) All cash transactions excepting cash purchase and cash sales (d) Both cash and bank transactions including discounts Q.19) A customers cheques returned dishonored is recorded in (a) Purchase return book (b) Sales return book (c) Cash book (d) Journal Q.20) Cash sales are recorded in (a) Sales book (b) Cash book (c) Journal (d) Petty cash book Q.21) The following are some of the transactions of a business during a month. 1. Selling goods for cash 2. Cash discount allowed to a customer 3. Cash deposited in bank account/ Cash paid into bank 4. Cash withdrawn from bank 5. Received cheques from Ram and allowed him discount 6. Sundry expenses paid in cash Which of these transactions are contract entries in cash book? (a) 2,3 and 4 (b) 1,2 and 6 (c) 3,4, and 5 (d) 3 and 4 Q.22) The discount column of a triple-column cash book records (a) Trade discount (b) Cash discount (c) Quantity discount

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BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

(d) Seasonal discount Q.23) When furniture is sold for cash, the entry should be made in (a) Sales book (b) Cash book (c) Journal (d) Petty cash book Q.24) The balance of cash account indicates (a) Net income for the period (b) Net loss for the period (c) Net cash on hand (d) Net worth of the business Q.25) Cash discounts are first recorded in (a) Journal (b) Cash book (c) Purchases book (d) Sales book Q.26) Cheque received and endorsed will be recorded in the Cash book in the ____ column (a) cash (b) Bank (c) Discount (d) None Q.27) Bearer cheque received is recorded in ___ column (a) Cash (b) Bank (c) Discount (d) None Q.28) Cheque received dishonoured will be recorded in (a) Debit side of Cash book (b) Credit side of cash book (c) Credited to customer (d) Debited to customer Q.29) The cash book recorded (a) All cash receipts (b) All cash payment (c) All cash receipts and payments (d) Cash & Credit sale of goods Q.30) Discount column in Cash-book should be (a) Totaled (b) Balance (c) Totalled and Balanced (d) Do nothing Q.31) Cash column in cash book always has (a) Credit balance (b) Both (a) and (c) (c) Debit balance (d) None of the above Q.32) Endorsed cheque dishonoured will be recorded in _____ column. (a) Cash (b) Bank (c) Discount (d) None Q.33) Cheque received deposited in Bank at a later date will be recorded in ____ column. (a) Cash (b) Bank (c) Discount (d) None Q.34) Cheque received dishonoured will be recorded in (a) Cash column debit side (b) Cash column credit side (c) Bank column debit side (d) Bank column credit side Q.35) Cheque issued dishonoured will be recorded in (a) Cash column debit side (b) Cash column credit side (c) Bank column debit side (d) Bank column credit side Q.36) Bank charges debited by Bank will be recorded in (a) Cash column debit side 17 (b) Cash column credit side (c) Bank column debit side (d) Bank column credit side Q.37) Interest charged by Bank will be recorded in (a) Cash column debit side (b) Cash column credit side (c) Bank column debit side (d) Bank column credit side Q.38) Interest credit by bank will be recorded in (a) Cash column debit side (b) Cash column credit side (c) Bank column debit side (d) Bank column credit side Q.39) Total of discount column on the debit side of cash book will be (a) Posted to debit of discount A/c (b) Posted to credit of discount A/c (c) Posted to Bank A/c (d) Posted to credit of customer A/c Q.40) Total of discount column on the credit side of cash book will be (a) Posted to debit of discount A/c (b) Posted to credit of discount A/c (c) Posted to Bank A/c (d) Posted to credit of customer A/c CAPITAL AND REVENUE EXPENDITURE Q.1) Capital expenditure provides benefit (a) Very short term (b) Long term (c) Short term (d) All of the above Q.2) Capital expenditure are recorded in the (a) Trading A/c (b) P&L A/c (c) Balance sheet (d) All of the above Q.3) The expired portion of capital expenditure is

BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

(a) An asset (b) A liability (c) An income (d) An expense Q.4) Preliminary expenses in connection with flotation of a new company is (a) Miscellaneous capital expenditure (b) Current assets (c) Fixed assets (d) All of the above Q.5) Dismantling and demolition charges is a (a) Deferred revenue expenditure (b) Capital expenditure (c) Revenue expenditure (d) None of the above Q.6) Recovery of bad debt is a (a) Revenue expenditure (b) Revenue receipt (c) Deferred revenue expenditure (d) Capital receipt Q.7) The un-expired portion of capital expenditure is shown in the financial statement (a) As a liability (b) As an asset (c) As an income (d) As an expense Q.8) Which of the following enhances the earning capacity of an assets? (a) Reduction in operation costs (b) Increase in working capacity of an assets (c) Replacing damage parts of an assets (d) Both (b) and (c) Q.9) Rs. 40,000 spent by a factory in overhauling of its existing plant & machineries. It has enhanced its working life by five years. The aforesaid expenditure is (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure (d) None of the above Q.10) Revenue expenditures are recorded in the (a) Manufacturing A/c (b) Trading A/c (c) P&L A/c (d) All the above Q.11) General Manager attended a meeting held abroad to develop market; meeting was successful. This expenses is in the nature of (a) Deferred revenue expenditure (b) Capital expenditure (c) Revenue expenditure (d) None of the above Q.12) Heavy amount spent for the advertisement jof new company product is (a) Revenue expenditure (b) Deferred revenue expenditure (c) Capital expenditure (d) Either (a) or (b) Q.13) Amount spent for the construction of temporary huts which were necessary for construction of the over bridge (flyover) and demolished when the flyover was ready is a (a) Capital expenditure (b) Deferred revenue expenditure (c) Revenue expenditure (d) Both (a) and (c) Q.14) A sum of Rs. 50,000 was spent on painting the new plant. It is a (a) Revenue expenditure (b) Capital expenditure (c) Deferred revenue expenditure (d) None of these Q.15) Amount spent on Structural alteration under pressure of law is a (a) Capital loss (b) Revenue expenditure 18 (c) Capital expenditure (d) Deferred revenue expenditure Q.16) Money spent Rs. 10,000 as travelling expenses of the directors on trips abroad for purchase of capital assets is (a) Capital expenditures (b) Revenue expenditure (c) Deferred revenue expenditure (d) None of the above Q.17) Amount of Rs. 5,000 spent as lawyers fee to defend a suit claiming that the firms factory site belonged to the plantiffs land. (a) Capital expenditures (b) Revenue expenditures (c) Deferred revenue expenditures (d) None of the above Q.18) Subsidy of Rs. 40,000 received from the government by a manufacturing concern. (a) Capital receipt (b) Revenue receipt (c) Capital expenditures (d) Revenue expenditures Q.19) Insurance claim received on account of machinery damaged completely by fire. (a) Capital receipt (b) Revenue receipt (c) Capital expenditures (d) Revenue expenditures Q.20) Interest on investments received from UTI. (a) Capital receipt (b) Revenue receipt (c) Capital expenditures (d) Revenue expenditures Q.21) Amount received from IDBI as a medium term loan for augmenting working capital. (a) Capital expenditures (b) Revenue expenditures (c) Capital receipt

BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

(d) Revenue receipt Q.22)Rs. 2,500 spent on the overhaul of machines purchased second-hand. (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure (d) None of the above Q.23) Advertising campaign to launch a new product. (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure (d) None of the above Q.24) An expenditure which benefits the _________ period is called revenue expenditure. (a) Current (b) Future (c) Past (d) None Q.25) Any expenditure incurred in acquiring a Fixed asset for the business is called ____________ (a) Revenue (b) Capital (c) Deferred revenue (d) None Q.26) Any expenditure incurred in achieving operative economy is known as __________ (a) Revenue (b) Capital (c) Differed revenue (d) None Q.27) Any expenditure incurred in acquiring the right to carry on a business is __________ (a) Capital (b) Revenue (c) Differed revenue (d) None Q.28) Money obtained by the issue of debentures is _________ receipt. (a) Capital (b) Revenue (c) Other (d) None Q.29) An expenditure is capital in nature when (a) The receiver of the amount is going to treat it for the sale of fixed assets. (b) It increases the quantity of fixed assets (c) It is paid as interest on loans for the business (d) Wages are paid to labour Q.30) An expenditure is revenue in nature, when (a) It benefits the current period (b) It benefits the future period (c) It belongs to the previous period (d) Computer is purchased Q.31) Discount allowed on issue of shares is an example of (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure. (d) None Q.32) Rs. 400 paid for removal of stock from new site. (a) Deferred Revenue Expenditure (b) Capital Expenditure (c) Capital Expenditure & Deferred Revenue Expenditure (d) Revenue expenditure Q.33) Cars piston and rings changed at a cost of Rs. 2,000 (a) Deferred Revenue Expenditure (b) Revenue expenditure (c) Capital Expenditure (d) Deferred Revenue Expenditure & Revenue Expenditure Q.34) Temporary rooms constructed for storing raw materials for the construction of a big building. (a) Capital Expenditure 19 (b) Deferred revenue expenditure. (c) Revenue expenditure (d) Deferred Revenue Expenditure & Revenue Expenditure Q.35) A machinery costing Rs. 5,000 has been sold; It realizes Rs. 3,000. A new machine is purchased for Rs. 9,000. (a) Revenue Loss & Capital expenditure (b) Capital expenditure (c) Revenue expenditure (d) Deferred revenue expenditure Q.36) Amount realised from sale of old furniture. (a) Revenue Receipt (b) Capital Receipt (c) Revenue & Capital Receipt (d) Capital expenditure Q.37) Amount received from a debtor whose account was previously written off as bad (a) Revenue Receipt (b) Capital Receipt (c) Revenue & Capital Receipt (d) Capital expenditure Q.38) Fees received from apprentices. (a) Capital expenditure (b) Revenue receipt (c) Capital receipt (d) Capital Receipt & Revenue Receipt Q.39) Amount contributed by the proprietor to augment his capital. (a) Capital Receipt & Revenue receipt (b) Capital receipt (c) Revenue receipt (d) Capital Expenditure Q.40) Rs. 4,000 spent towards addition to machinery in order to double the production. (a) Capital Expenditure (b) Revenue Expenditure (c) Deferred Revenue Expenditure

BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

(d) Deferred Revenue Expenditure & Revenue Expenditure Q.41) Rs. 1,500 incurred on repairs of machinery, necessitated by the negligence of the employees. (a) Revenue Expenditure (b) Capital Expenditure (c) Deferred Revenue Expenditure (d) Capital Expenditure & Revenue Expenditure Q.42) Underwriting commission paid on the issue of shares. (a) Deferred Revenue Expenditure (b) Revenue Expenditure (c) Capital Expenditure (d) Revenue Expenditure & Deferred Revenue Expenditure Q.43) An honorarium paid Rs. 3,500 to an architect for supervising the construction of the factory building. (a) Capital Expenditure (b) Deferred Revenue Expenditure (c) Revenue Expenditure (d) Revenue Expenditure & Deferred Revenue Expenditure Q.44) Loss caused by theft of cash by cashier during business hours. (a) Revenue Expenditure/Loss (b) Capital Expenditure (c) Deferred Revenue Expenditure (d) Deferred Revenue Expenditure & Revenue Expenditure Q.45) Mahender is a partner. He agrees to leave the partnership on payment of compensation of Rs. 20,000. (a) Capital Expenditure (b) Revenue Expenditure (c) Deferred Revenue Expenditure (d) Revenue Expenditure & Deferred Revenue Expenditure Q.46) Security deposit of Rs. 5,000 paid when submitting tender which is forfeited for breach of contract. (a) Revenue Expenditure/Loss (b) Capital Expenditure (c) Deferred Revenue Expenditure (d) Revenue Expenditure & Deferred Revenue Expenditure Q.47) Cost incurred Rs. 25,000 for moving the plant from one place to a favourable location. (a) Capital Expenditure (b) Revenue Expenditure (c) Deferred Revenue Expenditure (d) Revenue Expenditure & Deferred Revenue Expenditure Q.48) Replacement of a vital component part costing Rs. 1,500 which was damaged in transit for a new machine purchased (a) Deferred Revenue Expenditure (b) Revenue Expenditure (c) Capital Expenditure (d) Deferred Revenue Expenditure & Revenue Expenditure Q.49) Legal expenses incurred in a slaes tax appeal. (a) Revenue Expenditure (b) Deferred Revenue Expenditure (c) Deferred Revenue Expenditure & Revenue Expenditure (d) Capital Expenditure Q.50) Amount seating on increasing the seating capacity in a cinema hall is a (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure (d) None Q.51) Which of the following is capital expenditure? (a) Purchased a pencil sharpener at a cost of Rs.2 20 (b) Installing an escalator at cost of Rs. 5,600 in a three storey building which had previously been used without escalators (c) Painted delivery truck at a cost of Rs. 450 after two years of use (d) Rs. 200 spent for minor alterations in building Q.52) Expenses incurred on research and development is an example of (a) Capital expenditure (b) Revenue expenditure (c) Deferred revenue expenditure (d) None Q.53) Furniture of the book value of Rs. 1,500 was sold for Rs. 600 and new fixture of Rs. 1,000 was purchased and cartage of Rs. 25 paid What is the amount of capital expenditure? (a) Rs. 1,500 (b) Rs. 900 (c) Rs. 1,000 (d) Rs. 1,025 Q.54) An expenditure is a classified as capital expenditure when (a) The amount is large (b) It is shown in the balance sheet (c) It is to benefit a number of future years (d) It benefits only the current year Q.55) Which of the following receipts is of capital nature (a) Amount realised from sale of old furniture (b) Amount received from debtor whose account was previously written off as bad (c) Amount of interest receipt from bank on a fixed deposit (d) Amount realised from debtors against their debts Q.56) Which of the following receipts is of revenue nature

BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

Amount realised from sale of investments Dividend re ceived on investments Amount borrowed from a bank Compensation received from municipal corporation on acquisition of land for the construction of a road Q.57) Charging of capital expenditure to revenue results in (a) Revenue reserve (b) Capital reserve (c) Secret reserve (d) None of these Q.58) Expenses incurred on Trial Run is: (a) Capital Expenditure (b) Revenue Expenditure (c) Deferred Revenue Expenditure (d) Prepaid Expenses Q.59) Brokerage on the issue of shares and debentures is a ------------------- expenditure: (a) Revenue (b) Capital (c) Deferred Revenue (d) Partly Capital partly revenue Q.60) What is the difference between deferred revenue expenditure and prepaid expenses? (a) Accounting treatment (b) Estimation of amount (c) Benefit for more than one accounting period (d) Nature of expenditure CONTINGENT ASSETS AND LIABILITIES Q.1) What obligation is n ot probable or the amount expected to be paid to settle the liability cannot be measured with sufficient reliability, it is called (a) Contingent liability (b) Provision (c) Secured loan (d) None of the above (a) (b) (c) (d) Q.2) Contingent asset usually arises from unplanned or unexpected events that give rise to (a) The possibility of an inflow of economic benefits to the business entity (b) The possibility of an outflow of economic benefits to the business entity (c) Either (a) or (b) (d) None of the above Q.3) If an inflow of economic benefits is probable then a contingent asset is disclosed (a) In the financial statements (b) In the report of the approving authority (Board of Directors in the case of a company, and the corresponding approving authority in the case of any other enterprise) (c) In the cash flow statement (d) None of the above Q.4) in the case of ---------------, either outflow of resources to settle the obligation is not probable or the amount expected to be paid to settle the liability cannot be measured with sufficient reliability. (a) Liability (b) Provision (c) Contingent liabilities (d) Contingent assets Q.5) present liability of uncertain amount, which can be measured reliable by using a substantial degree of estimation is termed as -------------. (a) Provision (b) Liability (c) Contingent liability (d) None of the above Q.6) In the financial statement, contingent liability is ---------------, (a) Recognized (b) Not recognized (c) Adjusted 21 (d) None of the above Q.7) The term provision is generally used to indicate known: (a) Depreciation; (b) Losses; (c) Incomes (d) None of these Q.8) Reserves are the items of: (a) Current liabilities (b) Owners equity (c) Loans (d) None of these Q.9) Reserves that arise from capital receipts are known as; (a) Capital reserve (b) Reserve fund (c) Income (d) None of these Q.10) Provisions are; (a) External transactions; (b) Internal transactions (c) Cash Transaction (d) None of these

BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

Friends Jeena ho to apnoo k liye jiyoo

Apne liye to har koi jeeta hai Your wealth, beauty and status are to be remembered for some time, But, Your good character will rule over the hearts forever. Hard work is the only way to success in CA Course(Ssshhhh)

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BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

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BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

Q.N. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

Ans. A A D D A A A D B C D C B B C C B A C A B C D B B A C

Q.N. 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58 59 60 61

Ans. B B A C B A B B C A C D C D A D A D D A D D D A D B A

Q.N. 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27

ACCOUNTING CONCEPTS & CONVENTIONS

Ans. Q.N. Ans. JOURNAL B 35 B B 36 A D 37 B C 38 C C 39 D D 40 D A 41 C A 42 B B 43 C A 44 C C 45 C B 46 B C 47 B B 48 C D 49 D A 50 B A 51 C C 52 C A 53 C B 54 B A 55 D D 56 D C 57 A A 58 B B 59 C B 60 C D LEDGER

Q.N. 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35

Ans. C B A A C A C D B A A A C B C B A D D B A B A A C D A B

Q.N. 43 44 45 46 47 48 49 50 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19

Ans. A B B A C B A A D A C B B D D C A B B B D D A C B C D

TRIAL BALANCE

Q.N. 27 28 29 30 31 32 33 34 35 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

Ans. C B B B C C C C C A B B C B C B B C A B B D A A B B B

SUBSIDIARY BOOK

Q.N. 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53

Ans. C A B D C D A C B D C A B D D C D D B B A B A C A A B D

Q.N. 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30

Ans. C D B A B A A C D D A C D B C D C B D B B C B A A B C D

Q.N. 38 39 40 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24

Ans. C A B B C D A B B B B C D C B A B B A B B A B C A C A

CAPITAL & REVENUE EXP.

Q.N. 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 53 54 55 56 57 58

Ans. D B A A B A B B A A A A A A A A C A D B C D C A B C A

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BRILLIANT COMMERCE ACADEMY(Self Evaluation Test-Answers) 2012

28 29 30 31 32 33 34 B A A B C D C 62 63 64 65 66 67 68 D A A B C B B 28 29 30 31 32 33 34 D A A A C A C 1 2 3 4 5 6 7 B A D C A D A 36 37 38 39 40 41 42 D B C A B A B 20 21 22 23 24 25 26 A D D C C D A 19 20 21 22 23 24 25 B B D A A D A 54 55 56 57 1 2 C C B B C D 31 32 33 34 35 36 37 C A A D C D D 25 26 27 28 29 30 31 B A A A B A C 59 60
Where Success Follows Brilliance

C B

C.B. & PETTY C.B.

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