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Accounting Quiz Unit II

Total questions: 40

Worksheet time: 20mins

Name
Class
Date
1.

The first record of a transaction is made in the:

a)

Ledger

b)

Trial Balance

c)

Journal

d)

Balance Sheet

2.

The process of allocating the cost of an intangible asset over its useful life is called:

a)

Depreciation

b)

Amortization

c)

Depletion

d)

Appreciation

3.

A Trial Balance will NOT detect which of the following errors?

a)

A wrong amount posted to an account

b)

A transaction completely omitted from the books

c)

An entry posted to the wrong side of an account

d)

An error in the balancing of an account

4.

The principal book of accounting where accounts are maintained is the:

a)

Journal

b)

Cash Book

c)

Ledger

d)

Day Book

5.

A credit sale of goods to Mr. X for ₹5,000 should be debited to:

a)

Sales Account

b)

Cash Account

c)

Mr. X's Account

d)

Purchases Account

6.

Under the Straight-Line Method (SLM), the amount of depreciation each year is:

a)

Increasing

b)

Decreasing

c)

Constant

d)

Fluctuating

7.

An amount set aside out of profits to meet a specific future liability is a:

a)

Reserve

b)

Provision

c)

Contingent Asset

d)

Fictitious Asset

8.

Goodwill is an example of a(n):

a)

Tangible Asset

b)

Fictitious Asset

c)

Current Asset

d)

Intangible Asset

9.

The GST paid on the purchase of goods is known as:

a)

Output GST

b)

Input GST

c)

Exempt GST

d)

Zero-rated GST

10.

Treating a revenue expenditure as a capital expenditure is an error of:

a)

Omission

b)

Commission

c)

Principle

d)

Duplication

11.

The narration written below a journal entry provides a:

a)

Calculation of the amount

b)

Brief explanation of the transaction

c)

Reference to the ledger page

d)

Debit and credit summary

12.

The closing balance of a liability account is always a:

a)

Debit balance

b)

Credit balance

c)

Zero balance

d)

Either debit or credit balance

13.

Which document serves as the evidence for a transaction?

a)

Journal

b)

Ledger

c)

Source Document (Voucher/Invoice)

d)

Trial Balance

14.

When goods are returned to a supplier, which account is credited?

a)

Purchases Account

b)

Supplier's Account

c)

Purchases Return Account

d)

Sales Return Account

15.

The left side of a ledger account is known as the:

a)

Credit side

b)

Balance side

c)

Debit side

d)

Footing side

16.

If a machine is purchased for ₹1,00,000 and has a useful life of 10 years, the annual depreciation under SLM (assuming no scrap value) is:

a)

₹1,00,000

b)

₹10,000

c)

₹5,000

d)

₹20,000

17.

A 'Reserve' is an appropriation of:

a)

Revenue

b)

Expense

c)

Profit

d)

Capital

18.

A software license purchased by a company is classified as a(n):

a)

Tangible Asset

b)

Intangible Asset

c)

Fictitious Asset

d)

Current Asset

19.

If the total of the debit side of a trial balance is more than the credit side, it indicates:

a)

The business is profitable

b)

There are one or more errors in the books

c)

The business is insolvent

d)

The accounts are accurate

20.

Payment of salary to an employee should be credited to:

a)

Salary Account

b)

Employee's Account

c)

Cash/Bank Account

d)

Capital Account

21.

The term 'inventory' refers to:

a)

Office furniture

b)

Stock of goods held for resale

c)

Cash in hand

d)

Accounts receivable

22.

The book in which all accounts are maintained is called a:

a)

Journal

b)

Ledger

c)

Cash Book

d)

Day Book

23.

The balance of the 'Purchases Account' is always a:

a)

Debit balance

b)

Credit balance

c)

Nil balance

d)

Either a debit or credit balance

24.

'Receivables' are also known as:

a)

Creditors

b)

Debtors

c)

Suppliers

d)

Lenders

25.

The account used to temporarily hold the difference in a trial balance is the:

a)

Capital Account

b)

Difference Account

c)

Rectification Account

d)

Suspense Account

26.

Which of the following is NOT a tangible asset?

a)

Building

b)

Machinery

c)

Trademark

d)

Vehicle

27.

What is the journal entry for receiving rent of ₹2,000 in cash?

a)

Debit Rent A/c, Credit Cash A/c

b)

Debit Cash A/c, Credit Rent A/c

c)

Debit Landlord A/c, Credit Cash A/c

d)

Debit Cash A/c, Credit Capital A/c

28.

A trial balance lists the balances of:

a)

Only personal accounts

b)

Only real accounts

c)

Only nominal accounts

d)

All ledger accounts

29.

Which of the following is an 'Error of Commission'?

a)

A transaction is not recorded at all

b)

Posting the wrong amount to the correct account

c)

Treating a capital expense as a revenue expense

d)

Recording the same transaction twice

30.

What is the nature of a transaction?

a)

It is always a cash exchange

b)

It is a business event that can be measured in money

c)

It is a plan for future business

d)

It is an agreement between two employees

31.

'Payables' are amounts owed to:

a)

Customers

b)

Owners

c)

Suppliers

d)

Government for tax

32.

A credit note is issued for:

a)

Purchases

b)

Sales

c)

Purchases Return

d)

Sales Return

33.

The objective of charging depreciation is to:

a)

Show a lower profit to pay less tax

b)

Spread the cost of an asset over its useful life

c)

Save cash for replacing the asset

d)

Reduce the market value of the asset

34.

If the total debits in a trial balance equal the total credits, it means:

a)

There are no errors in the books

b)

There are no errors of principle or omission

c)

The arithmetical accuracy of the ledger is established

d)

The business is financially sound

35.

The ledger is also known as the:

a)

Book of Original Entry

b)

Book of Final Entry

c)

Day Book

d)

Memorandum Book

36.

When a business pays a creditor, the journal entry involves a debit to the:

a)

Cash Account

b)

Purchases Account

c)

Creditor's Account

d)

Owner's Capital Account

37.

The process of finding the difference between the total debits and credits of an account is called:

a)

Posting

b)

Journalizing

c)

Casting

d)

Balancing

38.

Which of these is NOT a reserve?

a)

General Reserve

b)

Capital Reserve

c)

Provision for Doubtful Debts

d)

Dividend Equalization Reserve

39.

The trial balance is prepared:

a)

At the beginning of the accounting year

b)

On a daily basis

c)

At the end of the accounting period

d)

Whenever the owner wants

40.

An entry posted twice in the ledger is an error of:

a)

Principle

b)

Omission

c)

Duplication

d)

Commission

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