Mock Test Accounts

ICA CALICUT
BASICS OF ACCOUNTING
MULTIPLE CHOICE QUESTIONS
1. A bank reconciliation statement is prepared to know the causes for
the differences between:
a. The balances as per cash column of cash book and the pass
book
b. The balances as per bank column of cash book and the pass
book
c. The balances as per bank column of cash book and cash column
of cash book
d. None of the above
2. Which of the following is of capital nature:
a. Purchase of goods
b. Cost of repair
c. Wages paid for installation of machinery
d. Rent of factory
3. Which financial statement represents the accounting equation
“assets = liabilities + owners’ equity”
a. Trading account
b. Profit &loss account
c. Balance sheet
d. Statement of cash flows
4. “Business unit separate and distinct from the owner of it ”,is based
on:
a. Money measurement
b. Going concern concept
c. Business entity concept
d. Dual aspect concept
5. If two or more transactions of the same nature are journalize together
having either the debit or credit account common is known as:
a. Compound journal entry
b. Separate journal entry
c. Posting
d. Journalizing
6. A ………………. Is sent to a customer when he returns the goods
a. Debit note
b. Credit note
c. Proforma invoice
d. Bill
7. Writing of the transactions in the ledger is called……………………
a. Posting
b. Journalizing
c. Balancing
d. Auditing
10. A withdrawal of cash from the business by the proprietor should be
Credited to:
a. Drawings A/c
b. Capital A/c
c. Cash A/c
d. Current A/c
11. Narrations are given at the end of …………………………….
a. Final accounts
b. Trial balance
c. Each ledger accounts
d. Each journal entry
12. Which of the following lists the balance and the title of accounts in
the ledger on a given date?
a. P & L account
b. Balance sheet
c. Income statement
d. Trial balance
13. Which of the following is not a transaction?
a. Goods are purchased on cash basis for Rs.1000
b. Salaries paid for the month of may 2009
c. Land is purchased for Rs.10 lacs
d. An employee is dismissed from the job
14. Payment of personal expenses of the owners of business need to
be recorded as:
a. Drawing
b. Liabilities
c. Expenses
d. Gains
15. Difference of totals of both debit and credit side of the trial balance
is transferred to:
a. Suspense account
b. Trading account
c. P & L account
d. Current account
16. Carriage inward is debited to :
a. Suspense account
b. Trading account
c. P & L account
d. P & L appropriation account
17. Double column cash book records :
a. Only cash transactions
b. All transactions
c. Cash and bank transactions
d. Cash purchase and cash sales transactions
18. All of the following have debit balance except one. That account is
………
a. Wages account
b. Debtors account
c. Good will
d. Bills payable account
19. Drawings are deducted from ………………………….
a. Sales
b. Purchases
c. Expenses
d. Capital
20. ……………………… will generally show a debit balance.
a. Bank loan
b. Bad debt recovered
c. Salary payable
d. Drawings
21. Which of the following account will have credit balance?
a. Sales return
b. Bills receivable
c. Carriage inward
d. Outstanding wages
22. Depreciations arises because of :
a. Fall in the market value of the asset
b. Fall in the value of money
c. Physical wear and tear of asset
d. Inflation in the market
23. Goodwill is ………………………….
a. Current account
b. Fictitious asset
c. Tangible asset
d. Intangible asset
24. In case of debit balance , the words …………. are written on the
debit side.
a. To balance b/d
b. To balance c/d
c. By balance b/d
d. By balance c/d
25. Bank pass book is also known as …………………………………..
a. Bank book
b. Bank account
c. Bank column
d. Bank statement
26. Capital expenditure are recorded in the ………………..
a. Balance sheet
b. Profit & loss account
c. Trading account
d. Manufacturing account
27. Bank overdraft has a ………………………….. balance
a. Debit
b. Credit
c. Negative
d. Favorable
28. Bills Receivable is a ………………………….
a. Tangible asset
b. Intangible asset
c. Fixed asset
d. Current asset
29. Carriage outward is debited to ………………………………..
a. Trading account
b. P/L account
c. Profit and loss appropriation account
d. Balance sheet
30. Which of the following is correct?
a. Capital = Asset – Liabilities
b. Capital = Asset + Liabilities
c. Asset = Liabilities – capital
d. Liabilities = Asset + capital
31. In the ledger there are …………………….. columns.

a. 4
b. 6
c. 8
d. 10
32. Book debts normally has ……………………… balance.
a. Credit
b. Debit
c. Unfavorable
d. None of the above.
33. Capital expenditure provide ………………………… benefits
a. Long period
b. Short period
c. Very short period
d. None of the above
34. Loss leads to reduction in …………………………………..
a. Liability
b. Capital
c. Income
d. Asset
35. Current assets does not include :
a. Cash
b. Stock
c. Debtors
d. Furniture
36. Stock is ……………………………………….
a. Fixed asset
b. Current asset
c. Investments
d. Intangible asset
37. All of the following have debit balance except:
a. 6% debentures
b. Loan to contractor
c. Interest on debentures
d. Audit fees
38. Salary and wages is debited to:
a. Trading account
b. P/L account
c. Profit and loss appropriation account
d. Balance sheet
39. Wages and salary is debited to:
a. Trading account
b. P/L Account
c. Profit and loss appropriations account
d. Balance sheet
40. Which of the following account will have credit balance?
a. Bank over draft
b. Carriage inwards
c. Prepaid expenses
d. Bills receivable
41. Three column cash book records …………………………
a. Only cash transactions
b. All transactions
c. Cash bank and discount transactions
d. Cash purchase and cash sales transactions
42. A person who owes money to the business is a
…………………………
a. Debtor
b. Creditor
c. Investor
d. Supplier
43. A ……………………….. is person to whom business owes money.
a. Debtor
b. Creditor
c. Investor
d. Proprietor
44. ………………………….denote goods bought for sale.
a. Sale
b. Expense
c. Purchase
d. Revenue
45. ………………….. is the major source of revenue of any business.
a. Investment
b. Advances
c. Loan
d. Sales
46. ……………….. refers the amount invested by the owner into
business.
a. Loan
b. Advance
c. Capital
d. Prepaid expenses
47. Assets having definite shape and physical existence are
called……….
a. Tangible asset
b. Intangible asset
c. Wasting asset
d. Fictitious asset
48. ……………….. is an example for fictitious asset.
a. Machinery
b. Stock
c. Patent
d. Preliminary expenses
49. …………………… is the book of original entry.
a. Journal
b. Voucher
c. Invoices
d. Ledger
50. The process of ascertaining the balance of a particular account on
a given date is :
a. Posting
b. Journalizing
c. Balancing
d. Accounting
1.
2.
3.

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ICA CALICUT

10. A withdrawal of cash from the business by the proprietor should be

30. Which of the following is correct?

a. Capital = Asset – Liabilities

b. Capital = Asset + Liabilities

c. Asset = Liabilities – capital

d. Liabilities = Asset + capital

31. In the ledger there are …………………….. columns.

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