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Chapter - 4

The document contains 25 multiple choice questions related to accounting concepts and principles such as the accounting equation, debits and credits, assets, liabilities, capital, revenues and expenses. It tests knowledge of basic bookkeeping records like sales day books, cash books, journals and how specific transactions are recorded and affect the accounting equation. It also contains questions about accounting for non-current assets, loans, inventory and current assets. The questions cover a wide range of introductory accounting topics.

Uploaded by

Neel Kosto
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
127 views

Chapter - 4

The document contains 25 multiple choice questions related to accounting concepts and principles such as the accounting equation, debits and credits, assets, liabilities, capital, revenues and expenses. It tests knowledge of basic bookkeeping records like sales day books, cash books, journals and how specific transactions are recorded and affect the accounting equation. It also contains questions about accounting for non-current assets, loans, inventory and current assets. The questions cover a wide range of introductory accounting topics.

Uploaded by

Neel Kosto
Copyright
© © All Rights Reserved
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd
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1.

Which concept underlies the principle of the double entry bookkeeping in which every
transaction is recorded twice?
a. Dual aspect
b. Cost of goods
c. Profit
d. Separate entity
2.

Which one of the following would be a fixed(non-current) assets?


a. Stock(inventory)
b. Bank overdraft
c. Debtors (receivables)
d. Factory premises

3. Which parts of the accounting equation are affected by paying off a loan by cash?
a. Assets, capital
b. Assets, liabilities
c. Capital, liabilities
d. Assets, capital, liabilities
4. A debit can represent three of the following. Which is the odd one out?
a. decrease in an assets
b. increase in an assets
c. decrease in an liability
d. increase in an expense
5. Which of the following is not a book of prime entry?
a. Sales day book
b. Petty cash book
c. Transfer journal
d. Bank account
6. Which of the following is a disadvantage of computers?
a. Speed
b. Accuracy
c. Vulnerability
d. File storage and processing
7. A credit can represent three of the following. Which is the odd one out?
a. decrease in an assets
b. increase in an assets
c. increase in an liabilities
d. increase in an capital
8. What is the purpose of a remittance advice?
a. It provides details of amounts being paid.
b. It identifies goods that have been received by the business.
c. It identifies goods that have been despatched by the business
d. It provides details of cheques to be issued
Teachers contact information
Md. Abdullah al mamun khan
Email: 111mamunkhan@gmail.com
Mobile: 01744295109

Page 1

9. X starts a business with $50,000 cash, buying inventory $10,000 from cash and paying
business expenses of $1,000. Inventory is purchased on credit for $5,000. Following these
transection, what is the capital of xs business?
a. $39,000
b. $49,000
c. $50,000
d. $54,000
10.A business received an accountants bill for $500. Which of the following statements
correctly shows the effect upon the accounting equation of the business, assuming the bill
is unpaid?
a. Assets decrease, liabilities increase
b. Capital decrease, liabilities increase
c. Capital increase, liabilities decrease
d. Assets decrease, capital decrease
11. Which of the following correctly records the payment of a loan of $10,000 plus
outstanding interesting $500?
a. Assets -$10,500, Capital -$10500
b. Assets +$10,500, liabilities +$10500
c. Assets -$10500, liabilities -$10,000, Expenses +$500
d. Assets -$10,500, liabilities -$10,500
12. Which of the following is an example of an item of revenue expenditure?
a. Insurance of goods in transit to customer.
b. Import duties charged on a new non-current asset for the business.
c. Delivery and installation costs of a new non-current assets.
d. A new delivery van.
13.Which of the following is an example of a prime record originating outside the business?
a. The cash book.
b. The bank statement.
c. The sales day book.
d. The purchase returns day book.
14.Returns outwards are recorded in which prime entry record?
a. Sales return day book.
b. The journal.
c. The cash book
d. The purchase return day book.
15.Credit note sent out are recorded in which prime entry record?
a. Sales returns day book.
b. General ledger.
c. Sales day book.
d. Purchase returns day book.
16. Which of the following statements is correct?
a. Every debit balance represents an expense
b. Assets are represent by debit balances
c. Liabilities are represented by debit balances
d. Income is included in the list of debit balances
17.Which of the following is a bank overdraft an example of?
a. An assets

b. A liability
c. Revenue
d. Expense
18. Andrea started a taxi business by transferring her car, worth $5,000, into the business.
What are the accounting entries required to record this?
a. Dr.
Capital
$5000
Cr.Car
$5000
b. Dr.
Car
$5000
Cr.
Drawings $5000
c. Dr.
Car
$5000
Cr.Capital
$5000
d. Dr.
Car
$5000
Cr.
Bank
$5000
19.A business has capital of $10,000. Which of the following asset and liability figures could
appear in this businesss statement of financial position (balance sheet)?
Assets
Liability
a. $6,000
$16,000
b. $6,000
$4,000
c. $10,000
$10,000
d. $14,000
$4,000
20.A business commenced with capital in cash of $1,000. Inventory costing $800 is purchase
on credit, and half is sold for $1,000 , the customer paying in cash at once.
The accounting equation after these transactions would show:
a. Assets $1600 equals capital $1600
b. Assets $2000 less liabilities $800 equals capital $1200
c. Assets $2400 less liabilities $400 equals capital $2000
d. Assets $2400 less liabilities $800 equals capital $1600
21.A business borrowed $1,700 from its bank, and used the cash to buy a new computer.
How is the accounting equation affected by this transection?
Assets
Liabilities
a. Unchanged
Overstated
b. Unchanged
Understated
c. Increased
Increased
d. Increased
Decreased
22.Which of following would be paid for by petty cash?
a. Car repairs on the business owners privet vehicle
b. Packet of envelopes at local store
c. Paying a supplier for goods brought on credit
d. Wages and salary
23.Which document is used to correct an overcharge in an original invoice?
a. Credit note
b. Debit note
c. Goods received note
d. Dispatch note
24.When does a contract become valid?
Teachers contact information
Md. Abdullah al mamun khan
Email: 111mamunkhan@gmail.com
Mobile: 01744295109

Page 3

a.
b.
c.
d.

When
When
When
When

there has been an invitation to treat


there has been an offer
the offer is accepted
there has been a breach

25.Which is an example of current asset?


a. Bank overdraft
b. Office equipment
c. Receivable
d. Payable

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