The basic accountingprincipleconcept according to which

Assignment Help Accounting Basics

Reference no: EM13614517

1. A business event which canbe measured in terms of money and must be recorded in books of accounts iscalled:

a. Condition

b. Information

c. Transaction

d. Record

2. The price paid for anitem, in terms of currency is called:

a. Sale

b. Cost

c. Debt

d. Revenue

3. The investment of cash inthe business will result in which of the following?

a. An increase in cash and adecrease in equity

b. An increase in cash and anincrease in equity

c. A decrease in cash and anincrease in equity

d. An increase in fees earnedand an increase in equity

4. Find out the missing valueof an Accounting Equation with the help of given data:

Furniture	90,000
Cash	100,000
Debtors	10,000
Other Assets	1,000
Owner's equity	90,000

a. Rs. 201,000 liabilities

b. Rs. 111, 000 liabilities

c. Rs. 290, 000 liabilities

d. Rs. 291, 000 liabilities

5. Mr." a " sold goods forRs. 300,000 to Mr. " B ", Rs. 300,000 will be treated as _____________ forbusiness of Mr." A".

a. Revenue

b. Net profit

c. Gross profit

d. Operating profit

6. Cost incurred for themaintenance of shop is considered as _________.

a. Deferred expense

b. Capital expense

c. Revenue expense

d. Preliminary expense

7. Income of the businessincludes:

a. Cash sales only

b. Credit sales only

c. Credit purchases only

d. Both cash sales and credit sales

8. The basic accountingprinciple/concept according to which Business is independent from its owner(s)is known as:

a. Separate Entity Concept

b. Matching Concept

c. Going Concern Concept

d. Materiality Concept

9. Which of the following isCORRECT according to the double entry system of book-keeping?

a. Debit = Credit

b. Debit > Credit

c. Debit < Credit

d. All of the given options

10. According to the doubleentry system of book keeping, the investment of Rs.10, 000 in the businessmade by the owner will effect:

a. Cash Account & Capital Account

b. Cash Account & ExpenseAccount

c. Capita Account & RevenueAccount

d. Capital Account & ExpenseAccount

11. What will be the effecton accounting equation, when payment is made to the creditor of the business?

a. Increase in an asset andincrease in a liability

b.õrax.øi5 asset and decrease in a liability

c. Increase in an asset andincrease in owner's equity

d. Decrease in an asset anddecrease in owner's equity

12. When a Liability isreduced or decreased, it is recorded on the:

a. Right or debit side of theaccount

b. Left or debitside of the account

c. Left or credit side of theaccount

d. Right or credit side of theaccount

13. Which of the followingtransaction have NO affect on stockholders' equity?

a. Purchase of building on credit

b. Dividends to stockholders

c. Net loss/Net profit

d. Investment in cash bystockholders

14. Which of the following isNOT correct?

a. Increase in Assets is Credit

b. Decrease in Expenses isCredit

c. Increase in Liability isCredit

d. Increase in Income is Credit

15. Which of the following isthe correct accounting cycle?

a. Occurrence of an Event-Voucher-Journal---Ledger--- TrialBalance---

Profit & Loss Account --- Balance Sheet

b. Occurrence of anEvent-Voucher-Ledger----Journal --- Trial Balance---

Profit & Loss Account ---Balance Sheet

c. Occurrence of anEvent-Voucher-Ledger----Journal --- Trial Balance --

Balance Sheet --- Profit &Loss Account

d. Occurrence of anEvent-Voucher-Ledger --- Trial Balance----Journal --

Balance Sheet --- Profit &Loss Account

16. Which of the followingevent is NOT considered as Transaction?

a. Mr. Afnan started businesswith Rs. 50,000.

b. Mr. Afnan took away goods forworth Rs. 2,000 from the business for personal use.

c. Mr. Afnan paid rent Rs. 2,000

d. Mr. Afnan Submitted a tender for goods worth Rs. 10,000

17. Any mistake in ledger canbe easily detected with the help of which of the following?

a. Trial Balance

b. Income Statement

c. Balance Sheet

d. Journal

18. A summarized record oftransactions related to individuals or things is called a/an ___________.

a. Account

b. Voucher

c. Journal

d. Trial balance

19. The process oftransferring journal entry information to the ledger is called:

a. Journalizing

b. Posting

c. Balancing

d. Analyzing

Reference no: EM13614517

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