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multple choice question abt accounting?

1. Which of the following is NOT an asset? A. Buildings B. Loan from K Harris C. Cash balance D. Debtors 2. Which of the following statements is INCORRECT? A. Liabilities + Capital = Assets B. Liabilities + Assets = Capital C. Assets - Capital = Liabilities D. Assets - Liabilities = Capital 3. Which of the following account has a normal credit balance? A. Sales B. Selling expenses C. Land D. Purchases 4. Posting’ the transactions in bookkeeping means: A. Entering items in a cash book B. Making the second entry of a double entry transaction C. Making the first entry of a double entry transaction D. Something other than the above 5. Which of the following best describes a trial balance? A. It is a list of balances on the books B. Shows the financial position of a business C. Shows all the entries in the books D. It is a special account 6. The process of recording the economic effects of business transactions in a book of original entry is known as which of the following? A. Double entry system B. Journalizing C. Debit D. Posting 7. If we take goods for own use we should: A. Debit -Sales Account; Credit -Stock Account B. Debit -Drawings Account; Credit -Purchases Account C. Debit -Drawings Account; Credit -Stock Account D. Debit -Purchases Account; Credit -Drawings Account 8. According to the rules of debit and credit for balance sheet accounts: A. Increase in assets, liability, and owner’s equity accounts are recorded by debits B. Decrease in assets and liability accounts are recorded by credits C. Increase in assets and owner’s equity accounts are recorded by debits D. Decrease in liability and owner’s equity accounts are recorded by debits 9. An entry that affects more than one accounts is knows as _____________. A. Journal entry B. Compound entry C. Adjusting entry D. Reversing entry 10. Which of these errors would be disclosed by the trial balance? A. Credit sales of Rs. 300 entered in both double entry accounts as Rs. 30 B. Cheque Rs. 95 from C Smith entered in Smith’s account as Rs. 59 C. Selling expenses had been debited to Sales Account D. A purchase of Rs. 250 was omitted entirely from the books 11. Which of the following is NOT true about the net income? A. It can be distributed among holders of common stock as a dividend B. It can be held by the firm as retained earnings C. It is a calculated figure and represents actual cash D. It is obtained by subtracting expenses from the revenues 12. Which of the following equation is CORRECT? A. Opening stock + purchases + closing stock = cost of goods sold B. Cost of goods sold – closing stock – purchases = opening stock C. Cost of goods sold + closing stock – opening stock = purchases D. Opening stock + cost of goods sold – purchases = closing stock 13. Which of the following is the cause of depreciation? A. Decrease in the market value of the asset B. Decrease in the book value of the asset C. Physical wear and tear of fixed assets D. Increase in the market value of assets 14. If sales returns are Rs. 25,000, sales are Rs. 125,000. Net purchases are Rs. 84,000 and gross profit is Rs. 21,000, then the cost of goods sold will be: A. Rs. 84,000 B. Rs. 64,000 C. Rs. 92,000 D. Rs. 79,000 15. A company has four employees that earn Rs. 180.00 per day. The employees are paid weekly, on Friday. December 31 would be on Wednesday. What is the adjustment to be made? A. Rs. 0 B. Rs. 1620 C. Rs. 1080 D. Rs. 540 16. Which of the following types of adjustments belongs to the accrued item class? A. Assets/Expense B. Liability/Revenue C. Asset/Liability D. Liability/Expense 17. Which of the following are parts of operating expenses? A. Interest expense and general expenses B. Selling expenses and cost of goods sold C. Interest expense and selling expenses D. General expense and selling expenses 18. The amount charged to customers for goods or services sold is called a (n): A. Expense B. Net income C. Revenue D. Asset 19. Which of the following is the largest single expense of most merchandising firms? A. Cost of goods sold B. Rent Expense C. Amortization Expense D. Salaries Expense 20. One purpose of closing entries is to give zero balances to which of the following accounts? A. Asset and liability accounts B. Liability and capital accounts C. Revenue and expense accounts D. Expense and capital accounts

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1. Question AnswerQuestion Answer 1B11C 2B12C 3A13A 4D14A 5A15A 6D16 7C17A 8C18C 9C19A 10C20C