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(2023) Accounts Officer PakMcqs MCQS > Set#02 (Accounting) > Flashcards

Set#02 (Accounting) Flashcards

1
Q

Which of the following is the normal balance of a rent expense account?
0

A. Credit balance
B. Cash balance
C. Overdraft
D. Debit balance

A

D. Debit balance

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2
Q

Revenue and expense accounts are referred as______________?
0

A. Nominal accounts
B. Real account
C. Cash accounts
D. Banks account

A

A. Nominal accounts

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3
Q

The real accounts are accounts of Assets, liabilities and ___________?
0

A. Expenses
B. Revenues
C. Capital
D. Drawing

A

C. Capital

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4
Q

Building account is classified as _________ account?
0

A. Nominal
B. Real
C. Cash
D. Capital

A

B. Real

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5
Q

Office equipments account is classified as _________ account?
0

A. Nominal
B. Real
C. Cash
D. Capital

A

B. Real

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6
Q

___________ helps business to classify transactions according to their nature?
0

A. General journal
B. Real accounts
C. Ledger accounts
D. Cash accounts

A

C. Ledger accounts

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7
Q

Which of the following is a real account?
0

A. Office equipment
B. Rent expenses
C. Rent income
D. Insurance expense

A

A. Office equipment

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8
Q

Which of the following accounts are closed at the end of an accounting period?
0

A. Nominal accounts
B. Balance sheet accounts
C. Real accounts
D. None of them

A

A. Nominal accounts

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9
Q

Which of the following is the closing balance of a ledger account?
0

A. Balance c/d
B. Balance b/d
C. Balance e/d
D. Balance f/c

A

A. Balance c/d

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10
Q

The Basic accounting equation is___________?
0

A. Asset=Expense +Income
B. Assets=Cash+Capital
C. Assets=Capital+Liabilities
D. Assets=Expenses+Capital

A

C. Assets=Capital+Liabilities

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11
Q

Find out the value of assets if: Liabilities=$5000 and Capital=$1000
0

A. $4000
B. $6000
C. $7000
D. $3000

A

D. $3000

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12
Q

Capital increases if _________ increases?
0

A. Expenses
B. Drawings
C. Interest on capital
D. Revenue

A

D. Revenue

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13
Q

Capital of a business decreases if there is an increase in___________?
0

A. Drawings
B. Income
C. Gains
D. Fresh capital

A

A. Drawings

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14
Q

If the total liabilities of a business decrease by $5000 what will be the effect on total asset?
0

(assuming the amount of capital remain same)

A. Remain constant
B. Decrease by $5000
C. Increase by $5000
D. Increase by $10,000

A

B. Decrease by $5000

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15
Q

If the business’s owner withdraws cash for his/her personal use what will be the effect on capital?
0

A. Increase in capital
B. Remain the same
C. Decrease in capital
D. No effect on capital

A

C. Decrease in capital

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16
Q

Net income equal to Revenues minus____________?
0

A. Gains
B. Depreciation
C. Expenses
D. Capital expenditures

A

C. Expenses

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17
Q

Collection of account receivable will
0

A. Increase assets and decrease assets
B. Increase assets and decrease liabilities
C. Increase assets and increase capital
D. Increase assets and increase cash

A

A. Increase assets and decrease assets

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18
Q

Payment of expenses will ______ the assets
0

A. Increase
B. Reduce
C. apportion
D. Overstate

A

B. Reduce

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19
Q

Which of the following is the practical implementation of the accounting equation?
0

A. Cash flow statement
B. Income statement
C. Statement of changes in equity
D. Statement of financial position

A

D. Statement of financial position

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20
Q

Which of the following accounting equation is correct?
0

A. Cash+Other assets=Capital-Liabilities
B. Capital+ Liabilities=Assets+Income
C. Assets-Liabilities=Capital
D. Assets+Capital=Liabilities

A

C. Assets-Liabilities=Capital

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21
Q

Fresh capital introduction will increase____________?
0

A. Assets and liabilities
B. Assets and equity
C. Liabilities and equity and bank balance
D. Capital and liabilities

A

B. Assets and equity

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22
Q

Cash received for services rendered will______________?
0

A. Increase cash and liability
B. Increase equity and liability
C. Increase fixed assets and cash
D. Increase cash and equity

A

D. Increase cash and equity

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23
Q

Which of following best describes the increase in equity expands___________?
0

A. Business operations
B. cash outflows
C. Inflows of cash
D. Appropriation expenses

A

A. Business operations

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24
Q

If Cash=$1000 inventories=$4000 Debtors=$5000 fixed assets=? Capital+Liabilities=$15000 What is the Amount of total assets?
4

A. $5000
B. $10,000
C. $15,000
D. $20,000

A

A. $5000

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25
Q

Depreciation decreases____________?
0

A. Liabilities
B. Cash
C. Bank
D. Capital

A

D. Capital

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26
Q

An increase in provision for bad debt will____________?
0

A. Decrease net income
B. Decrease liabilities
C. Increase net income
D. Increase liabilities

A

A. Decrease net income

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27
Q

Current assets – Current liabilities=?
0

A. Capital
B. Absorbed capital
C. Net assets
D. Net working capital

A

D. Net working capital

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28
Q

Assets-Liabilities=____________?
0

A. Cash
B. Equity
C. Net income
D. Net expenses

A

B. Equity

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29
Q

The process of recording is done?
0

A. Two times a year
B. once a year
C. Frequently during the accounting period
D. At the end of a accounting period

A

C. Frequently during the accounting period

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30
Q

General journal is a book of _______ entries?
0

A. First
B. Original
C. Secondary
D. Generic

A

B. Original

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31
Q

The process of recording transactions in different journals is called_________?
0

A. Posting
B. Entry making
C. Adjusting
D. Journalizing

A

D. Journalizing

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32
Q

Every business transaction affects at least ________ accounts?
0

A. One
B. Two
C. Three
D. Infinite

A

B. Two

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33
Q

Discount allowed is a kind of deduction from_____________?
0

A. Account payable
B. Account receivable
C. Cash account
D. Discount account

A

B. Account receivable

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34
Q

The other name of journal is____________?
0

A. Ledger
B. T account
C. Day book
D. Cash book

A

C. Day book

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35
Q

A journal entry in which two or more account is debited or credited is referred as____________?
0

A. Journal entry
B. Multi entry
C. Additional entry
D. Compound entry

A

D. Compound entry

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36
Q

he term 2/10-n/30 implies that ______ % discount will be given if the payment is made within days or full amount is receivable within 30 days?
1

A. 2,10
B. 10,2
C. 10,30
D. 3,15

A

A. 2,10

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37
Q

Goods returned by customer should be debited to which of the following accounts?
0

A. Sales income account
B. Sales account
C. Return inward account
D. Expenses account

A

C. Return inward account

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38
Q

Discount allowed is___________?
0

A. Expense of business
B. Income of business
C. Loss of business
D. Abnormal loss of business

A

A. Expense of business

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39
Q

_________ is the evidence that a transaction took place?
0

A. Source documents
B. Ledger
C. Bonds
D. Journals

A

A. Source documents

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40
Q

Which of the following will be debited if a business purchases goods on credit?
0

A. Cash
B. Debtor
C. Creditor
D. Purchases

A

D. Purchases

41
Q

Which of the following accounts will be debited if the business’s owner withdraws cash from business for his personal use?
0

A. Drawings
B. Cash
C. Business
D. Stock

A

A. Drawings

42
Q

Journals are also referred as_____________?
0

A. Book of entries
B. Book of original entries
C. T account
D. Books of economic event

A

B. Book of original entries

43
Q

The standard format of journal does not include which of the following?
0

A. Assets column
B. Date column
C. Description column
D. Amount column

A

A. Assets column

44
Q

In which of the following orders data is entered in journal?
0

A. Alphabetical order
B. Numeric order
C. Bullets order
D. Chronological order

A

D. Chronological order

45
Q

Which of the following accounts will be credited if a company purchases building for cash?
0

A. Capital account
B. Fixed assets account
C. Building account
D. Cash account

A

D. Cash account

46
Q

Discount for quick repayment of debt is normally referred as____________?
0

A. Trade discount
B. Prompt payment discount
C. Cash discount
D. Bulk discount

A

C. Cash discount

47
Q

The first step in accounting process is___________?
0

A. Recording the transaction
B. Identifying the transaction
C. Posting the transaction
D. Preparing the source documents

A

B. Identifying the transaction

48
Q

A chart of accounts generally start with which of the following types of accounts?
0

A. Assets accounts
B. liability accounts
C. Cash accounts
D. Revenue accounts

A

A. Assets accounts

49
Q

Total depreciation of an asset cannot exceed its:
10

A. Scrap value
B. Residual value
C. Market value
D. Depreciable value

A

D. Depreciable value

50
Q

Amount paid to Masood posted to the credit side of his account would affect___________?
0

A. Masood’s account
B. Cash account
C. Cash account and Gagan’s account
D. None of these

A

A. Masood’s account

51
Q

Which of the following statements is/are true ?
0

A. A sale of an asset is recorded in the Sales Book
B. Total of Return Outward Book is debited to Return Outward Account
C. The balance of Petty Cash Book is a liability
D. Cash Book is a subsidiary book as well as a ledger

A

D. Cash Book is a subsidiary book as well as a ledger

52
Q

Which of the following is true regarding closing entries?
0

A. They must be followed by reversing entries
B. They transfer the balances in all of the Nominal Accounts to the Trading and Profit and Loss Account
C. They must be made after the reversing entries but before the adjusting entries
D. They must be made after the adjusting entries but before the reversing entries

A

D. They must be made after the adjusting entries but before the reversing entries

53
Q

Closing stock is generally valued at______________?
0

A. Cost Price
B. Market Price
C. Cost price or Market price whichever is higher
D. Cost price or Market price whichever is lower

A

D. Cost price or Market price whichever is lower

54
Q

Which of the following assets is/are to be valued at the lower of cost and net realizable value?
0

A. Goodwill
B. Inventories
C. Investments
D. Both B. and C. above.

A

B. Inventories

55
Q

A few errors committed in Ahhiwalia’s books of account are given below. State which errors would affect the Trial Balance.
0

(a). Sales of 950 to Ram completely omitted from books of account (b). Purchases of 720 from Shyam entered in the purchases journal as 700 (c). Purchases Journal is overcast by 1,000
(d). Sales returns journal is undercast by 200 (e) Amount paid to Agarwal wrongly posted to the debit to Mittal’s account (f) Bank overdraft shown under debit column in the Trial Balance (g) Sales of 500 to Sadiq entered in sales journal as sales to Mushtaq
(h) Wages paid for installation of machinery debited to wages account

A. a, c and g
B. c, d and f
C. c, d, e and h
D. c, d, f and h

A

B. c, d and f

56
Q

Which of the following methods is not a practical way of realizing revenue?
0

A. Delivery method
B. Percentage-of-completion method
C. Production method
D. Moving average method

A

D. Moving average method

57
Q

The amount payable to a person as consideration for the use of rights vested in him is
0

A. Dividend
B. Royalty
C. Purchase consideration
D. Installment

A

B. Royalty

58
Q

Buildings account is debited with an amount towards repairs. This is an example of?
0

A. Error of commission
B. Error of principle
C. Error of omission
D. Compensating error

A

B. Error of principle

59
Q

The concept of conservatism will have the effect of______________?
0

A. Overstatement of Assets
B. Understatement of Assets
C. Overstatement of Liabilities
D. Understatement of Liabilities

A

B. Understatement of Assets

60
Q

During the year 2011-2012, the value of closing inventory was overstated by 25,000. Which of the following is true?
0

A. The cost of goods sold was overstated during 2011-2012 and income will be understated during 2012-2013
B. The income was overstated during 2011-12 and closing inventory will be overstated during 2012-2013
C. The retained earnings was overstated during 2011-2012 and retained earnings will be understated during 2012-2013
D. The cost of goods sold was understated during 2011-2012 but retained earnings will not be affected during 2012-2013

A

C. The retained earnings was overstated during 2011-2012 and retained earnings will be understated during 2012-2013

61
Q

Which of the following errors is an error of omission?
0

A. Sale of ` 100 was recorded in the Purchases Journal
B. Wages paid to Mohan have been debited to his account
C. The total of the sales journal has not been posted to the Sales Account
D. Repairs to buildings have been debited to buildings account

A

C. The total of the sales journal has not been posted to the Sales Account

62
Q

Which of the following statements is /are true?
0

A. Entering wrong amount in the subsidiary book affects the agreement of the Trial Balance
B. Undercasting or overcastting of a subsidiary book is an example or error of commission
C. Errors of principle do not affect the agreement of Trial Balance
D. Both B. and C. above

A

D. Both B. and C. above

63
Q

Which of the following is true?
0

A. Error of casting affects personal accounts
B. Omission of a transaction from a subsidiary record affects only one account
C. Error of carry forward affects two accounts
D. Error of principle involves an incorrect allocation of expenditure or receipt between capital and revenue

A

D. Error of principle involves an incorrect allocation of expenditure or receipt between capital and revenue

64
Q

Journal proper is meant for recording_____________?
0

A. Credit purchase of fixed assets
B. Return of goods
C. All such transactions for which no special journal has been kept by the business
D. None of these

A

C. All such transactions for which no special journal has been kept by the business

65
Q

Closing stock in the Trial Balance implies that______________?
0

A. It is already adjusted in the opening stock
B. It is adjusted in the Purchase A/c
C. It is adjusted in the Cost of Sale A/c
D. It is adjusted in the Profit &Loss A/c

A

B. It is adjusted in the Purchase A/c

66
Q

Which of the following statements is true?
0

A. If a Trial Balance tallies, it always means that none of the transactions has been completely omitted
B. A Trial Balance will not tally if a transaction is omitted
C. A customer to whom goods have been sold on credit cannot avail himself of a cash discount
D. A credit balance in the Pass Book indicates excess of deposits over withdrawals

A

D. A credit balance in the Pass Book indicates excess of deposits over withdrawals

67
Q

The adjustment to be made for income received in advance is:
0

A. Add income received in advance to respective income and show it as a liability
B. Deduct income received in advance from respective income and show it as a liability
C. Add income received in advance to respective income and show it as asset
D. Deduct income received in advance from respective income and show it as an asset in the Balance Sheet

A

B. Deduct income received in advance from respective income and show it as a liability

68
Q

Which of the following statements is correct about Trial Balance?
1

A. The Trial Balance is prepared after preparing the Profit and Loss Account
B. The Trial Balance shows only balances of Assets and Liabilities
C. The Trial Balance shows only nominal account balances
D. The Trial Balance has no statutory importance from the point of view of law

A

D. The Trial Balance has no statutory importance from the point of view of law

69
Q

While finalizing the current year‘s accounts, the company realized that an error was made in the calculation of closing stock of the previous year. In the previous year, closing stock was valued more by 50,000. As a result
0

A. Previous year‘s profit is overstated and current year‘s profit is also overstated.
B. Previous year‘s profit is understated and current year‘s profit is overstated.
C. Previous year‘s profit is overstated and current year‘s profit is understated.
D. There will be no impact on the profit of either the previous year or the current year.

A

C. Previous year‘s profit is overstated and current year‘s profit is understated.

70
Q

Which of the following is not correct about Errors?
1

A. Errors which affect one account can be errors of posting
B. Errors of omission arise when any transaction is left to be recorded
C. Errors of carry forward from one year to another year affect both Personal and Real A/c
D. Errors of commission arise when any transaction is recorded in a fundamentally incorrect manner

A

The correct answer is C. Errors of carry forward from one year to another year affect both Personal and Real A/c.

Errors of carry forward do not affect both Personal and Real Accounts. They only affect Real Accounts. This is because Personal Accounts are closed at the end of each financial year, while Real Accounts are not. As a result, any errors in Personal Accounts will be corrected when the accounts are closed, while errors in Real Accounts will be carried forward to the next financial year.

The other three options are all correct statements about errors. Errors of omission arise when any transaction is left to be recorded. Errors of commission arise when any transaction is recorded in a fundamentally incorrect manner. Errors which affect one account can be errors of posting.

71
Q

If goods worth 1,750 returned to a supplier is wrongly entered in sales return book as 1,570, then
0

A. Net Profit will decrease by 3,140
B. Gross Profit will increase by 3,320
C. Gross Profit will decrease by 3,500
D. Gross Profit will decrease by 3,320

A

D. Gross Profit will decrease by 3,320

72
Q

If goods worth 1,750 returned to a supplier is wrongly entered in sales return book as 1,570, then
0

A. Net Profit will decrease by 3,140
B. Gross Profit will increase by 3,320
C. Gross Profit will decrease by 3,500
D. Gross Profit will decrease by 3,320

A

D. Gross Profit will decrease by 3,320

73
Q

Purchase journal is kept to record_____________?
0

A. All purchases of goods
B. All credit purchases of goods
C. All credit purchases
D. None of these

A

B. All credit purchases of goods

74
Q

The beginnings inventory of the current year is overstated by 5,000 and closing inventory is overstated by 12,000. These errors will cause the net income for the current year by
0

A. 17,000 (overstated.
B. 12,000 (understated.
C. 7,000 (overstated.
D. 7,000 (understated.

A

C. 7,000 (overstated.

75
Q

The accountant of Leo Ltd. recorded a payment by cheque to a creditor for supply of materials as 1,340.56. The bank recorded the cheque at its correct amount of 3,140.56. The Company has not passed any rectification entries and the error is not detected through the bank reconciliation. The impact of this error is
0

A. The Trial Balance will not agree
B. The balance of creditors is understated
C. The purchases are understated
D. The favorable bank balance as per Pass Book is less than the Bank balance as per Cash book

A

D. The favorable bank balance as per Pass Book is less than the Bank balance as per Cash book

76
Q

Which of the following errors affects the agreement of a Trial Balance?
0

A. Mistake in balancing an account
B. Omitting to record a transaction entirely in the subsidiary books
C. Recording of a wrong entry in the subsidiary books
D. Posting an entry on the correct side but in the wrong account

A

A. Mistake in balancing an account

77
Q

Which of the following should not be treated as revenue expenditure?
0

A. Interest on loans and debentures
B. Annual fire insurance premiums on Plant and Equipment
C. Sales tax paid in connection with the purchase of office equipment
D. Small expenditures on long- lived assets, such as ` 20 for a paper weight.

A

C. Sales tax paid in connection with the purchase of office equipment

78
Q

Capital expenditure is an expenditure which
0

A. Benefits the current accounting period
B. Will benefit the next accounting period
C. Results in the acquisition of a permanent asset
D. Results in the acquisition of a current asset

A

C. Results in the acquisition of a permanent asset

79
Q

Which of the following is not a deferred revenue expenditure?
1

A. Expenses in connection with issue of equity shares
B. Preoperative expenses
C. Heavy advertising expenses to introduce a new product
D. Legal expenses incurred in defending a suit for breach of contract to supply goods

A

The correct answer is A. Expenses in connection with the issue of equity shares.

Deferred revenue expenditures refer to expenses incurred during a particular accounting period but are allocated over a future period or periods. They are treated as an asset on the balance sheet and gradually charged to expenses over time. The purpose is to match the expenditure with the revenue it generates.

Options B, C, and D can be considered deferred revenue expenditures:

B. Preoperative expenses: These are expenses incurred before the commencement of business operations, such as feasibility studies, market research, and legal fees. These expenses are spread over a specific period, typically the expected life of the business or a predetermined number of years.

C. Heavy advertising expenses to introduce a new product: Advertising expenses incurred to introduce a new product are often treated as deferred revenue expenditures. The benefits of the advertising campaign are expected to extend beyond the current accounting period, so the expenses are recognized over the anticipated period of benefit.

D. Legal expenses incurred in defending a suit for breach of contract to supply goods: Legal expenses incurred in defending a suit can also be considered a deferred revenue expenditure. These expenses are expected to provide future benefits to the business, such as preserving the reputation or protecting assets, and are therefore treated as assets and amortized over the expected period of benefit.

A. Expenses in connection with the issue of equity shares: This option does not fall under the category of deferred revenue expenditures. Expenses related to the issue of equity shares, such as underwriting fees or fees paid to legal advisors, are typically treated as a direct reduction of shareholders’ equity rather than being spread over multiple periods.

Therefore, option A is not a deferred revenue expenditure.

80
Q

Any donation received for a specific purpose is a_________?
0

A. Liability
B. Assets
C. Revenue receipts
D. Capital receipts

A

D. Capital receipts

81
Q

Which of the following is an item of capital expenditure?
0

A. Research and development costs during the year
B. Interest on borrowed fund utilized for acquisition of Office Furniture
C. Installation charges paid in conjunction with the purchase of Office Equipment
D. Monthly rent of a machinery used in the business

A

C. Installation charges paid in conjunction with the purchase of Office Equipment

82
Q

The balance of which of the following accounts do not disappear, once they are debited/credited to Trading Account?
0

A. Sales
B. Purchases
C. Inward returns
D. Closing stock

A

D. Closing stock

83
Q

Which one of the following should be considered a revenue expenditure?
0

A. 1000 paid for the execution of a new plant
B. Loss of 10,000 incurred in increasing the sitting accommodation of a hotel
C. Damage paid on account of breach of a contract to supply certain goods
D. Repair to machinery purchased, second hand.

A

C. Damage paid on account of breach of a contract to supply certain goods

84
Q

Which of the following statements are / is true? – Events after Balance Sheet are?
0

A. All the significant events after the Balance Sheet date
B. The events after Balance Sheet date but before submitting it to the Registrar of Companies
C. The events after Balance Sheet date but before its approval by the board
D. All changes after Balance Sheet date before its approval

A

C. The events after Balance Sheet date but before its approval by the board

85
Q

Which one of the following is a capital expenditure?
0

A. Compensation paid to Directors on termination of their services
B. Expenditure incurred in connection with the renewal of a Trade Mark.
C. Gratuities paid to Directors on termination of their services.
D. Royalty paid in installments for the purchase of rights to manufacture and sell patient medicines.

A

A. Compensation paid to Directors on termination of their services

86
Q

Which of the following enhances the earning capacity of an asset?
0

A. Increase in working capacity of an asset
B. Reduction in operating costs
C. Replacing damaged parts of an asset
D. Both A. and C. above

A

D. Both A. and C. above

87
Q

Which of the following items should not be capitalized relating to fixed assets?
0

A. Interest payable on loans or deferred credits taken for the acquisition or construction of fixed assets before they are ready for use
B. Stand by equipment and servicing equipment
C. Expenditure incurred on test runs and experimental production
D. Administration and general expenses

A

D. Administration and general expenses

88
Q

Which of these errors affect only one account?
0

A. Errors of casting
B. Errors of carry forward
C. Errors of posting
D. All the three

A

D. All the three

89
Q

Which of these errors affect two or more accounts
0

A. Errors of complete omission
B. Errors of principle
C. Errors of posting to wrong account
D. All the three

A

D. All the three

90
Q

Which of the following error is an error of principle
0

A. 5,000 received from Sham credited to Ram A/c
B. 5,000 incurred on installation of new plant debited to travelling expenses A/c
C. 500 paid for wages debited to salary A/c
D. 500 being purchase of raw material debited to purchase A/c ` 50

A

B. 5,000 incurred on installation of new plant debited to travelling expenses A/c

91
Q

Which of the following is an one sided error?
0

A. 500 purchase of old equipment not recorded in the books of A/c at all
B. 500 being expense on travelling expense credited to travelling expenses
C. Both
D. None

A

B. 500 being expense on travelling expense credited to travelling expenses

92
Q

Any gain on the sale of non-current assets should be _________ from the net profit and the loss must be _________to the net profit in determining fund from operation?
0

A. Added, Reduced
B. Added, Added
C. Deducted, Added
D. Deducted, Deducted

A

C. Deducted, Added

93
Q

Cash book records?
0

A. Only cash sales
B. All types of cash receipts and payments
C. Only revenue receipts
D. Only capital receipts

A

B. All types of cash receipts and payments

94
Q

In a three column cash book_______________does not exist?
0

A. Cash column
B. Bank column
C. Petty cash column
D. Discount column

A

C. Petty cash column

95
Q

Which of these transactions will not be recorded in cash book?
0

A. Cash received from debtors
B. Cash paid to creditors
C. Salary remained outstanding
D. Cash deposited with bank

A

C. Salary remained outstanding

96
Q

The closing balance of a petty cash book is a / an___________?
0

A. Liability
B. Gain
C. Assets
D. Loss

A

C. Assets

97
Q

Which column of a cash book will not have credit balance___________?
0

A. Bank column
B. Discount column
C. Cash column
D. None

A

C. Cash column

98
Q

Petty cash balance is a/an___________?
0

A. Assets
B. Expenditure
C. Liability
D. None

A

A. Assets

99
Q

Which of these is a Part of cash in hand?
0

A. Postage stamps
B. B/R
C. Cheque Deposited with Bank
D. B/R endorsed

A

A. Postage stamps

(2023) Accounts Officer PakMcqs MCQS (5 decks)

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