WorksheetsCMAF-ACC-2
Total questions: 84
Worksheet time: 1hrs 24mins
When goods worth ₹10,000 are returned by a customer who originally purchased for ₹40,000 (profit margin irrelevant), which is the correct journal entry in the books of the seller?
Debit Sales Returns ₹10,000; Credit Debtor ₹10,000
Debit Debtor ₹10,000; Credit Sales Returns ₹10,000
Debit Sales Returns ₹10,000; Credit Cash/Bank ₹10,000
Debit Cash/Bank ₹10,000; Credit Sales Returns ₹10,000
A trader receives goods from a supplier as free samples for display, not for resale. Which is the correct treatment?
Debit Purchases; Credit Supplier
Debit Samples/Promotional Expense; Credit Supplier
Debit Stock-in-Trade; Credit Supplier
No entry
Which entry records the allowance to customer for defect in goods already sold (not return)?
Debit Sales Return; Credit Debtor
Debit Discount Allowed; Credit Debtor
Debit Sales; Credit Debtor
Debit Debtor; Credit Sales Allowance/Revenue
A firm pays telephone bill of ₹5,000 that relates partly to previous year (₹1,000) and partly to current year (₹4,000). On payment, proper journal entry should be:
Debit Telephone Expense ₹5,000; Credit Cash ₹5,000
Debit Telephone Expense ₹4,000; Debit Prepaid Expense ₹1,000; Credit Cash ₹5,000
Debit Telephone Expense ₹4,000; Credit Cash ₹4,000; Debit Prior Period Expense ₹1,000
Debit Prior Period Expense ₹1,000; Debit Telephone Expense ₹4,000; Credit Cash ₹5,000
Goods worth ₹2,000 withdrawn by proprietor for personal use (no sales). Correct journal entry:
Debit Drawings ₹2,000; Credit Purchases ₹2,000
Debit Owner’s Capital ₹2,000; Credit Purchases ₹2,000
Debit Drawings ₹2,000; Credit Stock-in-Trade ₹2,000
Debit Drawings ₹2,000; Credit Cash ₹2,000
Discount allowed to a customer of ₹500 is recorded as:
Debit Discount Allowed ₹500; Credit Cash/Bank ₹500
Debit Cash/Bank ₹500; Credit Discount Allowed ₹500
Debit Discount Received ₹500; Credit Cash ₹500
Debit Debtor ₹500; Credit Discount Allowed ₹500
In which situation is a contra entry passed in cash book?
When money is paid to a creditor by cheque
When deposit is made into bank from cash or cash withdrawn from bank for office use
When a discount is received from supplier
When sales are made for cash
A trader receives ₹50,000 from customer in full settlement of ₹55,000 due, and the creditor allows the discount. What is the correct journal?
Debit Cash ₹50,000; Debit Discount Allowed ₹5,000; Credit Debtor ₹55,000
Debit Cash ₹50,000; Credit Debtor ₹50,000; Debit Discount Allowed ₹5,000; Credit Debtor ₹5,000
Debit Cash ₹50,000; Credit Debtor ₹55,000; Debit Discount Allowed ₹5,000
Debit Cash ₹50,000; Debit Debtor ₹5,000; Credit Discount Allowed ₹55,000
Entry for accrual basis recording of interest income ₹6,000 earned but not received:
Debit Bank ₹6,000; Credit Interest Income ₹6,000
Debit Interest Receivable ₹6,000; Credit Interest Income ₹6,000
Debit Interest Income ₹6,000; Credit Interest Receivable ₹6,000
No entry until received
Purchase of machinery on credit ₹1,00,000 with installation charges ₹5,000 paid in cash — correct entries:
Debit Machinery ₹1,05,000; Credit Creditor ₹1,00,000; Credit Cash ₹5,000
Debit Machinery ₹1,00,000; Debit Installation Expense ₹5,000; Credit Creditor ₹1,00,000; Credit Cash ₹5,000
Debit Machinery ₹1,05,000; Credit Creditor ₹1,05,000
Debit Machinery ₹1,00,000; Credit Creditor ₹1,00,000; Debit Repairs ₹5,000; Credit Cash ₹5,000
If a cheque received is dishonoured, the entry to record the dishonour in the books of payee is:
Debit Bank; Credit Debtor
Debit Debtor; Credit Bank
Debit Debtor; Credit Bills Receivable
Debit Bills Receivable; Credit Debtor
On receiving goods from supplier for ₹20,000 with trade discount 5% and cash discount 2% on payment, initial journal entry at purchase should be:
Debit Purchases ₹19,000; Credit Supplier ₹19,000
Debit Purchases ₹19,000; Credit Supplier ₹19,000; record cash discount on payment later
Debit Purchases ₹20,000; Credit Supplier ₹20,000; adjust discount on payment
Debit Purchases ₹19,600; Credit Supplier ₹19,600
Goods worth ₹10,000 sent on consignment (not recorded as sale). Sender’s books entry:
Debit Consignment Account ₹10,000; Credit Sales ₹10,000
Debit Consignment Account ₹10,000; Credit Stock-in-Trade ₹10,000
Debit Stock-in-Trade ₹10,000; Credit Consignment ₹10,000
No entry until consignee sells
A provision for doubtful debts is to be created at 5% of debtors. If the provision is created by journal entry when debtor balance is ₹1,00,000 and earlier provision was ₹2,000, correct entry to adjust to new provision ₹5,000:
Debit Provision for Doubtful Debts ₹3,000; Credit Profit & Loss A/c ₹3,000
Debit Profit & Loss A/c ₹3,000; Credit Provision for Doubtful Debts ₹3,000
Debit Debtors ₹3,000; Credit Provision ₹3,000
No entry required
On acceptance of bill of exchange by debtor, which of the following is recorded?
Debit Bills Receivable; Credit Sales
Debit Debtor; Credit Bills Payable
Debit Bills Receivable; Credit Debtor
Debit Cash; Credit Bills Receivable
Posting from a journal entry “Debit Purchases ₹10,000; Credit Sundry Creditor ₹10,000” will create which of the following?
Increase in Supplier balance and decrease in Purchase account balance
Debit balance in Creditor account
A credit balance in Creditor (Sundry Creditor) account and increase in Purchases expense (debit)
No ledger impact until trial balance
If a sales return is posted to the wrong customer account, the immediate effect on trial balance will be:
Trial balance will not tally
There will be an overstatement of liabilities
Trial balance will still tally but with wrong account balances
Trial balance will be understated
Which is true about personal, real and nominal accounts for ledger classification?
Real accounts record incomes and expenses; nominal accounts record assets and liabilities
Personal accounts deal with persons; real accounts with assets; nominal accounts with incomes and expenses
Nominal accounts are personal accounts of firm’s proprietors
Real accounts represent only cash transactions
Where are closing stock or closing inventory entries posted at period end?
To Purchases Account only
To Trading Account and Stock Account (if maintained) as per entries — Credit Stock and Debit Trading (depending on method)
To Purchases Returns Account
To Profit & Loss directly
Which of the following is correct regarding the ‘contra’ posting between Cash and Bank ledger when the cash book records a deposit of cash into bank?
Both ledgers get debited
Cash ledger credited and Bank ledger debited
Cash ledger debited and Bank ledger credited
No posting is required in ledger
A ledger account shows ₹15,000 debit total and ₹10,000 credit total. The balance to be carried down is:
Debit balance ₹5,000
Credit balance ₹5,000
No balance
Debit balance ₹25,000
Which of following best explains contra entries posted to ledgers?
Entries affecting two asset accounts shown on opposite sides in the ledger and both entries are recorded from cash book contra column
Entries recorded when goods are returned by customer
Entries passed to correct an error in ledger
Entries recorded only for discounts
Suspense account is opened in the ledger when:
The trial balance agrees and all entries are posted
Trial balance does not tally and error cannot be located immediately
There is a missing ledger account only
Only when cash is short
Which principle guides the posting of compound journal entries to ledger accounts?
Each compound entry must be split so that each affected account receives its respective debit or credit posting
Compound entries are posted only to nominal accounts
Compound entries must be posted as a single entry to a suspense account only
Compound entries are illegal and need reclassification
A creditor was credited twice by mistake in ledger. What will be the effect?
Liability to the creditor is overstated and the trial balance will show a credit difference
No impact; totals will still tally
Debits are overstated and the trial balance will show a debit difference
Only the subsidiary ledger is affected and the trial balance remains unaffected
Unit 3 — Trial Balance — 10 MCQs. The primary purpose of a trial balance is to:
Prove that the ledger is free from all kinds of errors
Detect arithmetical errors in ledger posting and balancing
Ensure that profit has been correctly calculated
Replace the need for auditing
Unit 3 — Trial Balance — 10 MCQs. Which of the following errors will not be revealed by a trial balance?
Posting wrong amount on one side and correct amount on opposite side of another account (compensating errors)
A transaction omitted entirely from journal
A debit amount entered as credit of the same amount in the ledger
Transposition error with unequal amounts
Unit 3 — Trial Balance — 10 MCQs. If a debit of ₹1,000 is posted as ₹100, what will be the effect on the trial balance?
Trial balance will agree because both sides reduced
Trial balance will disagree by ₹900 on debit side
Trial balance will disagree by ₹900 on credit side
No effect until financial statements prepared
Unit 3 — Trial Balance — 10 MCQs. A sales book total of ₹50,000 is posted as ₹5,000 to the sales account. The trial balance will:
Agree since totals used are from subsidiary book
Show a shortfall on credit side of ₹45,000
Show overstatement on debit side of ₹45,000
Cause the purchases account to be wrong
Unit 3 — Trial Balance — 10 MCQs. A trial balance balances. Which of the following cannot be true?
No errors exist in ledger entries
Some errors may still be present (errors of omission, commission, compensating errors, etc.)
All postings may be correct arithmetically
Totals of debit and credit columns are equal
Unit 3 — Trial Balance — 10 MCQs. After final ledger balances are prepared, the trial balance shows debit column ₹5,00,000 and credit column ₹5,10,000. Which next step is appropriate?
Open a Suspense Account for ₹10,000 and adjust later
Immediately treat ₹10,000 as income
Ignore as it’s immaterial
Recalculate profit directly
Unit 3 — Trial Balance — 10 MCQs. A bill drawn for ₹5,000 on a debtor was recorded as ₹500 in the books of the drawer. Trial balance will:
Be short on credit side by ₹4,500
Be short on debit side by ₹4,500
Not affected
Show an overstatement on debit side by ₹4,500
Unit 3 — Trial Balance — 10 MCQs. If wages paid in cash are debited to Wages A/c instead of Cash A/c, the trial balance will:
Not tally (debit & credit unequal)
Still tally because both debit and credit sides are affected equally
Show wages overstated only
Show cash overstated only
Unit 3 — Trial Balance — 10 MCQs. Which error causes trial balance to still agree though financial statements will be wrong?
Complete omission of a transaction from books
Posting debit of ₹1,000 to debit of another account ₹1,000 (two debits)
Posting a credit twice
Errors of principle (e.g., treating capital expenditure as revenue)
Unit 3 — Trial Balance — 10 MCQs. A suspense account is to be opened where the difference is ₹2,500. Later it is discovered that a revenue receipt of ₹2,500 had been posted to capital account. The correct rectification entry to clear suspense would be:
Debit Capital ₹2,500; Credit Suspense ₹2,500; then Debit Suspense ₹2,500; Credit Revenue ₹2,500
Debit Suspense ₹2,500; Credit Capital ₹2,500
Debit Revenue ₹2,500; Credit Suspense ₹2,500
No entry required
Unit 4 — Subsidiary Books — 15 MCQs. Which of the following is not a subsidiary book?
Purchases Book
Sales Book
Journal Proper
Balance Sheet
Unit 4 — Subsidiary Books — 15 MCQs. Sales book records:
All cash sales only
Credit sales of goods only
Which subsidiary book would include details of goods returned to a supplier?
Purchases Book
Returns Outward Book (Purchase Returns Book)
Sales Book
Journal Proper
In a purchases day book, an invoice shows goods returned later. Where is the return recorded?
Purchases Returns Book and then posted to Supplier account and Purchases account
Purchases book again with negative sign
Journal Proper only
Cash Book
Which entry is passed from the sales book when a credit sale is made?
Debit Debtor Account; Credit Sales Account
Debit Cash; Credit Sales
Debit Sales; Credit Debtor
No entry until invoice is paid
A petty cash book is maintained on imprest system. Which statement is correct?
Petty cash is reimbursed for the amount actually left in the imprest fund
Petty cash is reimbursed to restore the imprest amount irrespective of amount remaining
Petty cash is not reimbursed; expenses are written off
Imprest system means petty cashier keeps all receipts
Which column in a three-column cash book shows both discount given and received?
Cash column
Bank column
Discount column (separate debit and credit discount columns)
Contra column
Transactions of dishonoured cheques are usually entered in which book?
Journal Proper or in the Cash Book with contra entries reversed and relevant journal entries for bills dishonoured
Purchases Book
Sales Book
Petty Cash Book
When goods are sold for cash and discount is allowed, how it is recorded in subsidiary books?
Cash Book: Cash received; Discount Allowed in discount column; Sales Book not used
Sales Book: Record sale and later record discount given in Sales Returns
Journal Proper: Record the transaction
Purchases Book: No entry
Which of the following best describes the purpose of Subsidiary Books?
To record only cash transactions
To record and classify transactions to reduce posting work to ledger and to provide detailed information
To replace the ledger entirely
To record final balances
In three-column cash book, bank overdraft appears on:
Debit side of Cash Book
Credit side of Bank column (as negative balance)
Discount column
Petty cash column
Which book records credit purchases of fixed assets?
Purchases Book
Journal Proper (because it is not purchase of stock but fixed asset)
Cash Book
Purchase Returns Book
If a credit sale is incorrectly entered in the Sales Book as cash sale, the immediate effect will be:
Overstatement of cash in Cash Book and understatement of Debtors balance in ledger (affects trial balance)
No effect because subsidiary books are separate
Only Sales account is affected
Purchases account will be affected
When discount received on settlement of supplier is entered in discount column of cash book, it affects which ledger?
Discount Received account (credit) and Bank/Cash (debit) are posted
Discount Allowed account only
Purchases account only
Supplier balance only
Which of the following is true about sundry debtors and sales book posting?
Each credit sale totals posted to Sales account and individual amounts posted to respective debtor accounts
Sales book totals are not posted to Sales account
Only totals are posted to debtor accounts
Sales book entries do not affect ledger until month end
A payment of ₹2,000 by cheque to a creditor is recorded in a three-column cash book. Which entries will be posted to ledger?
Credit Bank ₹2,000 and Debit Creditor ₹2,000
Debit Bank ₹2,000 and Debit Creditor ₹2,000
Credit Cash ₹2,000 and Debit Creditor ₹2,000
No posting required
If a cheque is issued but not presented for payment before the year-end, the bank column in cash book shows:
A decreased bank balance and should be adjusted in bank reconciliation as outstanding cheque
No effect; bank balance decreased only when presented
Bank overdraft automatically
Cash in hand decreased
Which entry is correct when bank charges are shown in bank statement but not yet recorded in the cash book?
Credit Bank; Debit Bank Charges Expense in cash book (i.e., record bank charges as expense and reduce bank balance)
Debit Bank; Credit Bank Charges Expense
No entry in cash book until bank sends memo
Record it in journal only
A contra entry is recorded in cash book when:
Cash is used to deposit into bank or bank withdrawal in cash for office use
Cash is paid to creditor
Cash is received from debtor
Sales return is received
Which statement about the bank column of a three-column cash book is true?
It records only receipts into bank and not payments
It serves as the book of prime entry for bank transactions and both receipts and payments through bank are recorded
It must always have a debit balance
It is only used when there is a bank overdraft
Standing instructions given to bank for direct debits of insurance premium from bank account should be recorded in:
Bank column of Cash Book when reflected in bank statement or when payment is certain to be made — usually record on receipt of bank statement or advice
Petty cash book
Purchases book
Not recorded until year-end
A credit entry of ₹1,200 in bank column of cash book indicates:
Bank has been credited i.e., payment/outflow by the firm; bank balance decreased (assuming normal debit bank balance)
Bank has been debited; funds received
Cash in hand increased
Discount received
While preparing bank reconciliation statement, which of the following items will be added to the balance as per cash book?
Cheques issued but not yet presented
Direct deposits by customers into bank account (not recorded in cash book)
Bank charges already recorded in cash book
Outstanding deposits already recorded in bank statement
If a cheque received is entered in cash book but dishonoured subsequently, which entries are passed?
Debit Debtor; Credit Bank (to reverse bank entry) and record bank charges where applicable
Debit Bank; Credit Debtor
No entry until cheque is re-presented
Debit Cash; Credit Debtor
Which of the following is recorded on the debit side of cash book?
Cash payment to creditor
Receipt of cash from customer
Bank charges
Discount allowed
Which of the following is an error of omission?
A sales transaction of ₹5,000 completely omitted from journal entry and subsidiary books
Posting wrong amount to the credit side instead of debit side
Goods returned by customer entered as purchase return
Goods purchased entered in sales book
Error of commission occurs when:
A transaction is omitted entirely from books
An amount is posted to the wrong account of the same class (e.g., wrong debtor) or arithmetic mistakes in posting though transaction recorded
The principle of accounting is violated (capital as revenue)
Only cash transactions are recorded wrong
Which error is an error of principle?
Purchase of fixed asset debited to Purchases account
Sales to wrong customer posted correctly in totals
If an error of omission causes trial balance to still tally, it must be:
A partial omission only
Omission of both debit and credit sides (i.e., completely omitted) — trial balance may still tally but accounts incomplete
Impossible — trial balance will always disagree
Only clerical error
If a wrong amount is posted to the credit side of one account and the same wrong amount is posted to the debit side of another account (both sides wrong by same amount), then the trial balance:
Will not tally
Will tally because both debit and credit columns affected equally (compensating error)
Will tally only if difference is nil in amounts
Will show suspense account balance
A purchase of ₹2,000 was wrongly posted to Purchases Account as ₹200. The effect on trial balance will be:
Trial balance will still agree but profit understated
Trial balance will disagree by ₹1,800 on debit side
Trial balance will disagree by ₹1,800 on credit side
No effect at all
An article purchased for personal use by proprietor was recorded as purchase of stock and credited supplier. The error is:
Error of principle and will affect financial statements though trial balance may tally
Error of omission only
Compensating error
Clerical mistake which only affects cash
Which is correct sequence for rectification when an error is discovered after trial balance and before preparation of final accounts?
Rectify journal entry; post to ledger; adjust trial balance and financial statements
Prepare final accounts and ignore the error
Open suspense account and adjust in next year
Only pass adjusting entry in profit & loss
On discovering that sales day book of ₹10,000 was posted as ₹1,000 to sales account, the rectifying journal entry should be:
Debit Suspense ₹9,000; Credit Sales ₹9,000 (if suspense was created earlier) or Debit Debtors ₹9,000; Credit Sales ₹9,000 depending on situation
Debit Sales ₹9,000; Credit Suspense ₹9,000
Debit Cash ₹9,000; Credit Suspense ₹9,000
No entry; close to profit & loss
If discount allowed ₹500 has been credited to Discount Received account by mistake, correct rectification entry is:
Debit Discount Received ₹500; Credit Discount Allowed ₹500
Debit Discount Allowed ₹500; Credit Discount Received ₹500
Debit Debtor ₹500; Credit Creditor ₹500
No rectification needed
How should an error where the Purchases book total was undercast by ₹2,000 and posted to Purchases Account as undercast by ₹2,000 be rectified if trial balance already agreed via Suspense Account?
Debit Purchases ₹2,000; Credit Suspense ₹2,000
Debit Suspense ₹2,000; Credit Purchases ₹2,000
Debit Purchases Returns ₹2,000; Credit Suspense ₹2,000
No entry needed
A creditor of ₹1,000 was treated as debtor in posting. Effect on trial balance:
Trial balance will still tally (both are personal accounts) but ledger misstatements exist
Trial balance will be out by ₹1,000
Trial balance will be out by ₹2,000
Cannot tell
If the trial balance shows a difference and it is found that a ₹2,500 credit balance was posted as debit in the ledger (i.e., reversed), the suspense account will show:
Debit ₹5,000
Credit ₹5,000
Debit ₹2,500
Credit ₹2,500
A sum received from A ₹1,200 was posted to A’s account as ₹2,100. The rectification entry to correct the overposting is:
Debit Suspense ₹900; Credit A ₹900 (if suspense used to adjust difference) or Debit A ₹900; Credit Suspense ₹900 depending on earlier practice
Debit A ₹900; Credit Suspense ₹900
Debit A ₹900; Credit Bank ₹900
Debit Bank ₹900; Credit A ₹900
If goods worth ₹5,000 returned by customer are posted to Purchases Returns instead of Sales Returns, effect will be:
Both Sales and Purchases overstated/understated leading to profit distortion though trial balance may still tally
Trial balance will be out by ₹5,000
Only debtor account affected
No impact on financials
An error of principle where capital expenditure treated as revenue expenditure will:
Understate assets and overstate expenses, reducing profit
Overstate assets and understate expenses
Not affect profit
Only affects cash book
Which of the following errors requires a counter entry in rectification (i.e., two-step adjustment)?
Error of omission where transaction omitted entirely
Error of commission where posting to wrong account but of same class requiring reversal and reposting
Error in casting of trial balance totals only
None — all rectifications are single step
If goods purchased on credit 4,000 were posted to Sales Book by mistake, the rectification entries (simplest) would include:
Debit Sales 4,000; Credit Purchases 4,000 (and reverse any postings to supplier/debtor as required)
Debit Purchases 4,000; Credit Sales 4,000
Debit Sales Returns 4,000; Credit Purchases Returns 4,000
No entry required
A sales to X of 3,000 was entered twice in sales day book. The corrective entry is:
Debit Suspense 3,000; Credit Sales 3,000 (if suspense opened earlier) or Debit X’s account 3,000; Credit Sales 3,000 to remove duplicate posting
Credit Suspense 3,000; Debit Sales 3,000
Debit Sales Returns 3,000; Credit X 3,000
No entry until next year
On discovering that purchase of 6,000 was omitted from books, what is the rectifying journal entry?
Debit Purchases 6,000; Credit Suspense or Creditor 6,000 depending on whether supplier known
Debit Suspense 6,000; Credit Purchases 6,000
Debit Purchases 6,000; Credit Cash 6,000
No entry — omit permanently
A debtor paid 1,000 by cash; entry was made as Debit Cash 1,000; Credit Bills Receivable 1,000. The correct rectification entry would be:
Debit Bills Receivable 1,000; Credit Debtor 1,000 and then Debit Cash 1,000; Credit Debtor 1,000 (or net effect)
Debit Debtor 1,000; Credit Bills Receivable 1,000
Debit Cash 1,000; Credit Debtor 1,000
No rectification required
If an amount 750 received from debtor A was posted to creditor A’s account, the rectification entry is:
Debit Creditor A 750; Credit Debtor A 750; then Debit Debtor A 750; Credit Bank/Cash 750 (net understandings)
Debit Debtor A 750; Credit Creditor A 750
Debit Bank 750; Credit Creditor A 750
No entry required
When should prior period errors be adjusted in books?
Adjusted retrospectively in the opening balance of current period and disclosed as prior period adjustments (as per accounting standards)
Adjusted through profit & loss of current year only without disclosure
Ignored if materiality is small
Adjusted by opening a new suspense account
A journal entry originally passed as Debit Office Expenses 1,200; Credit Sundry Creditor 1,200, for a purchase of office furniture, the rectification entry should be:
Debit Furniture 1,200; Credit Office Expenses 1,200 (to transfer to correct asset account)
Debit Office Expenses 1,200; Credit Furniture 1,200
Debit Suspense 1,200; Credit Furniture 1,200
No correction required
