Total depreciation of an asset cannot exceed its:?
A. Scrap value
B. Residual value
C. Market value
D. Depreciable value
B. Residual value
C. Market value
D. Depreciable value
A chart of accounts generally start with which of the following types of accounts??
A. Assets accounts
B. liability accounts
C. Cash accounts
D. Revenue accounts
B. liability accounts
C. Cash accounts
D. Revenue accounts
Discount for quick repayment of debt is normally referred as____________??
A. Trade discount
B. Prompt payment discount
C. Cash discount
D. Bulk discount
B. Prompt payment discount
C. Cash discount
D. Bulk discount
Which of the following accounts will be credited if a company purchases building for cash??
A. Capital account
B. Fixed assets account
C. Building account
D. Cash account
B. Fixed assets account
C. Building account
D. Cash account
Journals are also referred as_____________??
A. Book of entries
B. Book of original entries
C. T account
D. Books of economic event
B. Book of original entries
C. T account
D. Books of economic event
Which of the following will be debited if a business purchases goods on credit??
A. Cash
B. Debtor
C. Creditor
D. Purchases
B. Debtor
C. Creditor
D. Purchases
In which of the following orders data is entered in journal??
A. Alphabetical order
B. Numeric order
C. Bullets order
D. Chronological order
B. Numeric order
C. Bullets order
D. Chronological order
The standard format of journal does not include which of the following??
A. Assets column
B. Date column
C. Description column
D. Amount column
B. Date column
C. Description column
D. Amount column
_________ is the evidence that a transaction took place??
A. Source documents
B. Ledger
C. Bonds
D. Journals
B. Ledger
C. Bonds
D. Journals
Discount allowed is___________??
A. Expense of business
B. Income of business
C. Loss of business
D. Abnormal loss of business
B. Income of business
C. Loss of business
D. Abnormal loss of business
A journal entry in which two or more account is debited or credited is referred as____________??
A. Journal entry
B. Multi entry
C. Additional entry
D. Compound entry
B. Multi entry
C. Additional entry
D. Compound entry
Goods returned by customer should be debited to which of the following accounts??
A. Sales income account
B. Sales account
C. Return inward account
D. Expenses account
B. Sales account
C. Return inward account
D. Expenses account
Discount allowed is a kind of deduction from_____________??
A. Account payable
B. Account receivable
C. Cash account
D. Discount account
B. Account receivable
C. Cash account
D. Discount account
The other name of journal is____________??
A. Ledger
B. T account
C. Day book
D. Cash book
B. T account
C. Day book
D. Cash book
Every business transaction affects at least ________ accounts??
A. One
B. Two
C. Three
D. Infinite
B. Two
C. Three
D. Infinite
General journal is a book of _______ entries??
A. First
B. Original
C. Secondary
D. Generic
B. Original
C. Secondary
D. Generic
The process of recording transactions in different journals is called_________??
A. Posting
B. Entry making
C. Adjusting
D. Journalizing
B. Entry making
C. Adjusting
D. Journalizing
Assets-Liabilities=____________??
A. Cash
B. Equity
C. Net income
D. Net expenses
B. Equity
C. Net income
D. Net expenses
The process of recording is done??
A. Two times a year
B. once a year
C. Frequently during the accounting period
D. At the end of a accounting period
B. once a year
C. Frequently during the accounting period
D. At the end of a accounting period
Current assets – Current liabilities=??
A. Capital
B. Absorbed capital
C. Net assets
D. Net working capital
B. Absorbed capital
C. Net assets
D. Net working capital
An increase in provision for bad debt will____________??
A. Decrease net income
B. Decrease liabilities
C. Increase net income
D. Increase liabilities
B. Decrease liabilities
C. Increase net income
D. Increase liabilities
Depreciation decreases____________??
A. Liabilities
B. Cash
C. Bank
D. Capital
B. Cash
C. Bank
D. Capital
If Cash=$1000 inventories=$4000 Debtors=$5000 fixed assets=? Capital Liabilities=$15000 What is the Amount of total assets??
A. $5000
B. $10,000
C. $15,000
D. $20,000
B. $10,000
C. $15,000
D. $20,000
Which of following best describes the increase in equity expands___________??
A. Business operations
B. cash outflows
C. Inflows of cash
D. Appropriation expenses
B. cash outflows
C. Inflows of cash
D. Appropriation expenses
Fresh capital introduction will increase____________??
A. Assets and liabilities
B. Assets and equity
C. Liabilities and equity and bank balance
D. Capital and liabilities
B. Assets and equity
C. Liabilities and equity and bank balance
D. Capital and liabilities
Which of the following accounting equation is correct??
A. Cash Other assets=Capital-Liabilities
B. Capital Liabilities=Assets Income
C. Assets-Liabilities=Capital
D. Assets Capital=Liabilities
B. Capital Liabilities=Assets Income
C. Assets-Liabilities=Capital
D. Assets Capital=Liabilities
Payment of expenses will ______ the assets?
A. Increase
B. Reduce
C. apportion
D. Overstate
B. Reduce
C. apportion
D. Overstate
Net income equal to Revenues minus____________??
A. Gains
B. Depreciation
C. Expenses
D. Capital expenditures
B. Depreciation
C. Expenses
D. Capital expenditures
If the business’s owner withdraws cash for his/her personal use what will be the effect on capital??
A. Increase in capital
B. Remain the same
C. Decrease in capital
D. No effect on capital
B. Remain the same
C. Decrease in capital
D. No effect on capital
If the total liabilities of a business decrease by $5000 what will be the effect on total asset??
(assuming the amount of capital remain same) A. Remain constant
B. Decrease by $5000
C. Increase by $5000
D. Increase by $10,000
B. Decrease by $5000
C. Increase by $5000
D. Increase by $10,000
The Basic accounting equation is___________??
A. Asset=Expense Income
B. Assets=Cash Capital
C. Assets=Capital Liabilities
D. Assets=Expenses Capital
B. Assets=Cash Capital
C. Assets=Capital Liabilities
D. Assets=Expenses Capital
Find out the value of assets if: Liabilities=$5000 and Capital=$1000?
A. $4000
B. $6000
C. $7000
D. $3000
B. $6000
C. $7000
D. $3000
Capital of a business decreases if there is an increase in___________??
A. Drawings
B. Income
C. Gains
D. Fresh capital
B. Income
C. Gains
D. Fresh capital
Capital increases if _________ increases??
A. Expenses
B. Drawings
C. Interest on capital
D. Revenue
B. Drawings
C. Interest on capital
D. Revenue
Which of the following is the closing balance of a ledger account??
A. Balance c/d
B. Balance b/d
C. Balance e/d
D. Balance f/c
B. Balance b/d
C. Balance e/d
D. Balance f/c
Which of the following accounts are closed at the end of an accounting period??
A. Nominal accounts
B. Balance sheet accounts
C. Real accounts
D. None of them
B. Balance sheet accounts
C. Real accounts
D. None of them
Which of the following is a real account??
A. Office equipment
B. Rent expenses
C. Rent income
D. Insurance expense
B. Rent expenses
C. Rent income
D. Insurance expense
Office equipments account is classified as _________ account??
A. Nominal
B. Real
C. Cash
D. Capital
B. Real
C. Cash
D. Capital
Which of the following is the normal balance of a rent expense account??
A. Credit balance
B. Cash balance
C. Overdraft
D. Debit balance
B. Cash balance
C. Overdraft
D. Debit balance
Which of the following statements is incorrect regarding capital account??
A. Debit increases the capital account balance
B. Credit increases the capital account balance
C. Fresh capital increases the capital account balance
D. Net income increases the capital account balance
B. Credit increases the capital account balance
C. Fresh capital increases the capital account balance
D. Net income increases the capital account balance
The normal balance of asset account is____________??
A. Credit balance
B. Debit balance
C. Cash balance
D. Neither debit nor credit balance
B. Debit balance
C. Cash balance
D. Neither debit nor credit balance
The normal balance of liability account is____________??
A. Debit balance
B. Credit balance
C. Cash balance
D. Neither debit nor credit balance
B. Credit balance
C. Cash balance
D. Neither debit nor credit balance
The normal balance of capital account is_____________??
A. Credit balance
B. Debit balance
C. Cash balance
D. Neither debit nor credit balance
B. Debit balance
C. Cash balance
D. Neither debit nor credit balance
If debit balance is greater than creadit balance then the account blance will be__________??
A. Credit balance
B. Debit and credit balance
C. Cash balance
D. Debit balance
B. Debit and credit balance
C. Cash balance
D. Debit balance
Which of the following is known as the base for preparing trial balance??
A. Journal
B. Cash account
C. Ledger account
D. Balance sheet
B. Cash account
C. Ledger account
D. Balance sheet
_________ will be credited if goods are given as charity??
A. Cash
B. Charity
C. Purchases
D. Sales
B. Charity
C. Purchases
D. Sales
If credit side of a bank account is greater than the debit side, it indicates which of the following??
A. Bank overdraft
B. Cash at bank
C. Bank balance
D. Current Asset
B. Cash at bank
C. Bank balance
D. Current Asset
An account records the ___________ in the balance of an item??
A. Increase
B. Decrease
C. Increase or decrease
D. Appreciation
B. Decrease
C. Increase or decrease
D. Appreciation
Which of the following is the practical implementation of the accounting equation??
A. Cash flow statement
B. Income statement
C. Statement of changes in equity
D. Statement of financial position
B. Income statement
C. Statement of changes in equity
D. Statement of financial position
Transferring entries from journal to ledger account is commonly known as____________??
A. Recording
B. Transferring
C. Posting
D. Entry making
B. Transferring
C. Posting
D. Entry making
Identify the nominal account?
A. Machinery account
B. Building account
C. Creditors account
D. Rent expenses account
B. Building account
C. Creditors account
D. Rent expenses account
Identify the nominal account?
A. Machinery account
B. Building account
C. Creditors account
D. Rent expenses account
B. Building account
C. Creditors account
D. Rent expenses account
Double entry implies that?
A. Recording entries in journal
B. Recording entries in Ledger account
C. Recording two aspects of every transaction
D. Recording every transaction in books
B. Recording entries in Ledger account
C. Recording two aspects of every transaction
D. Recording every transaction in books
_______ the withdrawal of cash and goods by the owner of the busienss for his/her personal use??
A. Depreciation
B. Drawings
C. Outflow of cash
D. Appreciation
B. Drawings
C. Outflow of cash
D. Appreciation
Net loss occurs when______________??
A. Expenses are greater than Income
B. Expenses are less than Income
C. Expenses=Income
D. Liabilities are greater than income
B. Expenses are less than Income
C. Expenses=Income
D. Liabilities are greater than income
Identify the asset from the following:?
A. Cash and cash equivalent
B. Creditors
C. Notes payable
D. Bank loan
B. Creditors
C. Notes payable
D. Bank loan
What is equity??
A. Cash from the business
B. liability of a business
C. Owner's claim on total assets
D. Owner's claim on total liabilities
B. liability of a business
C. Owner's claim on total assets
D. Owner's claim on total liabilities
Which of the following is a liability??
A. Cash
B. Equipment
C. Debtors
D. Creditors
B. Equipment
C. Debtors
D. Creditors
What is the basic accounting equation??
A. Capital Liabilities=Assets
B. Assets liabilities =Capital
C. Capital assets=liabilities
D. Liabilities Capital
B. Assets liabilities =Capital
C. Capital assets=liabilities
D. Liabilities Capital
Which is the most important characteristic that all assets of a business have??
A. Long life of assets
B. Value of assets
C. Intangible nature of assets
D. Future economic benefits
B. Value of assets
C. Intangible nature of assets
D. Future economic benefits
Which of the following can be considered as the most important phase of accounting cycle and it is the primarily objective of financial accounting??
A. Identifying transactions
B. Preparing "T Accounts"
C. Preparing financial statements
D. Preparing trial balances
B. Preparing "T Accounts"
C. Preparing financial statements
D. Preparing trial balances
The gross decrease in economic benefits for the business are what??
A. Expenses
B. Obligations
C. Creditors
D. Income or gain
B. Obligations
C. Creditors
D. Income or gain
Liability are arisen from which of the following events??
A. Present event
B. Future event
C. Past event
D. None of them
B. Future event
C. Past event
D. None of them
________ is the gross inflow of economic benefits??
A. Assets
B. Liabilities
C. Income
D. Expenses
B. Liabilities
C. Income
D. Expenses
Liabilities are which of the following??
A. Resources
B. Obligations
C. Future benefits
D. Expenses
B. Obligations
C. Future benefits
D. Expenses
Keeping the log of financial information in books of original entries is called__________??
A. Recording
B. summarizing
C. Grouping
D. Processing
B. summarizing
C. Grouping
D. Processing
________ is a separate legal entity that Total capital can be divided in many shares.?
A. Partnership
B. Sole proprietorship
C. Company
D. Non-profit organization
B. Sole proprietorship
C. Company
D. Non-profit organization
For which step of accounting process the accountants of business entity prepare financial statements??
A. Identification of economic event
B. Communication of financial information
C. Recording financial information
D. Making decisions about business
B. Communication of financial information
C. Recording financial information
D. Making decisions about business
Bookkeeping mainly concerns with which part of accounting process??
A. Analyzing
B. Preparing financial statements
C. Recording financial information
D. Auditing the books of accounts
B. Preparing financial statements
C. Recording financial information
D. Auditing the books of accounts
Financial accounting provides financial information to all of the following external users except:?
A. Government agencies
B. investors
C. Creditors
D. Managers
B. investors
C. Creditors
D. Managers
Identify the correct sequence of accounting process?
A. Communicating→Recording→Identifying
B. Recording→Communicating→Identifying
C. Identifying→communicating→recording
D. Identifying→recording→communicating
B. Recording→Communicating→Identifying
C. Identifying→communicating→recording
D. Identifying→recording→communicating
In accounting an Economic event is referred to as:?
A. Cash
B. Bank statement
C. Transaction
D. Exchange of money
B. Bank statement
C. Transaction
D. Exchange of money
Credit memo or credit note No. is entered in which of the following journal??
A. General journal
B. Cash journal
C. Purchase journal
D. Sales return day book
B. Cash journal
C. Purchase journal
D. Sales return day book
Specialized journals are more adequate for which TYPE OF BUSINESSES??
A. Small businesses
B. Big businesses
C. Sole proprietorship
D. Partnership
B. Big businesses
C. Sole proprietorship
D. Partnership
BUSINESS paid rent amounting to $100″ which of the following specialized journals records this transaction??
A. Cash receipts journal
B. Cash payments journal
C. Sales journal
D. Purchase journal
B. Cash payments journal
C. Sales journal
D. Purchase journal
Which of the following is known as an evidence that a transaction took place??
A. Cash receipts journal
B. General journal
C. Source document
D. Cash book
B. General journal
C. Source document
D. Cash book
Debit note is the basis for recording a transaction in which of the following journals??
A. General journal
B. Cash journal
C. Purchase journal
D. Purchase return journal
B. Cash journal
C. Purchase journal
D. Purchase return journal
Credit note is the basis for recording a transaction in which of the following SPECIALIZED journals??
A. Purchase journal
B. Sales return journal
C. General journal
D. Cash receipt journal
B. Sales return journal
C. General journal
D. Cash receipt journal
Credit purchase of plant and machinery is recorded in which of the following journals??
A. General journal
B. Cash journal
C. Purchase journal
D. Purchase return journal
B. Cash journal
C. Purchase journal
D. Purchase return journal
A brief explanation recorded below every entry in general journal is commonly known as__________??
A. Narration
B. Explanation
C. Summary
D. Other information
B. Explanation
C. Summary
D. Other information
Cash purchases is recorded in which of the following specialized journals??
A. Purchase journal
B. Sales journal
C. Purchases return journal
D. Cash payments journal
B. Sales journal
C. Purchases return journal
D. Cash payments journal
Which of the following is a type of cash receipt journal cash payment journal??
A. Bank statement
B. Statement of cash flow
C. Cash book
D. Cash documents
B. Statement of cash flow
C. Cash book
D. Cash documents
Cash received from debtor is recorded in which of the following SPECIALIZED journals??
A. Purchase journal
B. Sales journal
C. Cash receipts
D. Cash payments journal
B. Sales journal
C. Cash receipts
D. Cash payments journal
Which of the following specialized journals records “goods returned by customers”??
A. Purchase journal
B. Sales journal
C. Purchases return journal
D. Sales return journal
B. Sales journal
C. Purchases return journal
D. Sales return journal
Sales and purchase journal don’t record__________??
A. Credit sales
B. Credit purchases
C. Credit sales and purchases
D. Cash sales and purchases
B. Credit purchases
C. Credit sales and purchases
D. Cash sales and purchases
Which of the following specialised journals will record “goods returned by the BUSINESS “??
A. Purchase journal
B. Sales journal
C. Purchases return journal
D. Sales return journal
B. Sales journal
C. Purchases return journal
D. Sales return journal
Which of the following account with normal balance is shown at the debit side of a trial balance??
A. Rent income account
B. Creditors account
C. Unearned income account
D. Cash account
B. Creditors account
C. Unearned income account
D. Cash account
Transactions that a BUSINESS doesn’t record in any specialised journal are recorded in which of the following journals or day books??
A. Cash payments journal
B. Cash receipts journal
C. Purchases return journal
D. General journal
B. Cash receipts journal
C. Purchases return journal
D. General journal
Another name of journal is_____________??
A. Specialized journal
B. Day book
C. Cash book
D. Record book
B. Day book
C. Cash book
D. Record book
A sale of Rs. 50.000 to A was entered as a sale to
B. This is an example of____________??
A. Error of omission
B. Error of commission
C. Compensating error
D. Error of principle
B. Error of commission
C. Compensating error
D. Error of principle
If debit balances = credit balances, trial balance only shows or check the ____________ and it does not indicate that no errors were made during recording and posting.?
A. Arithmetic accuracy
B. Errors of commission
C. Omissions of economic events
D. Understatements of balances
B. Errors of commission
C. Omissions of economic events
D. Understatements of balances
Trial balance is commonly prepared??
A. Frequently during the year
B. At the end of an accounting period
C. At the end of a month
D. At the end of a year
B. At the end of an accounting period
C. At the end of a month
D. At the end of a year
Debit balance = Credit balance in a trial balance indicates that:?
A. No error in recording transactions
B. No error in posting entries to ledger accounts
C. Account balances are correct
D. Mathematically Capital Liabilities=Assets
B. No error in posting entries to ledger accounts
C. Account balances are correct
D. Mathematically Capital Liabilities=Assets
Which of the following is true about a trial balance??
A. It lists down the balances of accounts
B. It lists down the balances of a balance sheet
C. It is a kind of financial statement
D. It is not a part of accounting cycle
B. It lists down the balances of a balance sheet
C. It is a kind of financial statement
D. It is not a part of accounting cycle
If a transaction is completely omitted from the books of accounts, will it affect the agreement of a trial balance??
A. Yes
B. No
C. Transactions can't be omitted
D. none of these
B. No
C. Transactions can't be omitted
D. none of these
________ is the common base for preparing a trial balance??
A. Ledger accounts
B. General Journal
C. Specialized journals
D. Balance sheet
B. General Journal
C. Specialized journals
D. Balance sheet
Trial balance is prepared to check accuracy of_______________??
A. Ledger accounts balances
B. Balance sheet balances
C. Income statement balances
D. Cash flow statement balances
B. Balance sheet balances
C. Income statement balances
D. Cash flow statement balances
Institute of Chartered Accountants of Pakistan was established in____________??
A. 1949
B. 1956
C. 1961
D. 1972
B. 1956
C. 1961
D. 1972
Goods sent on approval basis’ have been recorded as ‘Credit sales’. This is an example of____________??
A. Error of principle
B. Error of commission
C. Error of omission
D. Error of duplication
B. Error of commission
C. Error of omission
D. Error of duplication
The systems of accounting are _____________??
A. Two
B. Three
C. Five
D. Six
B. Three
C. Five
D. Six
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