Introduction to Accounting

Model question Paper

1. Accounting is-----------
a) An art b) A science c) both art and science d) None of the above
2. Which is the first book of accounts
a) Summa b) purchase book c) sales book d) cash book
3. Function of accounting is
a) Recording b) classifying c) summarizing d) All the above
4. Drawings refer to….
a) Withdrawing cash or goods from business for personal use
b) Purchasing of goods
c) Selling of goods
d) Withdrawing money from bank
5. Example of fixed asset is
a) Cash b) Building c) stock d) debtor
6. Users of accounting is/ are
a) Shareholders b) Employees c) Government d) All the above
7. Expand GAAP
a) Generally accepted accounting principles
b) Generally adopted accounting principles
c) General auditing and accounting policies
d) General authority and accounting policies.
8. Expand ASB
a) Auditing standard board
b) Accounting stable board
c) Accounting standard board
d) None
9. Business is a separate from its owners is a
a) Accounting period concept
b) Money measurement concept
c) Dual aspect concept
d) Business entity concept
10. ICAI stand for
a) Institute of chartered accountants of India
b) Institute of common auditing of India
c) Institute of council and communication of India
d) Institute of corporate affairs of India
11. Dual aspect concept includes
a) Debit aspect b) Credit aspect c) Both debit and credit d) None of the above
12. Accounting concepts are
 a) Principles b) practices c) Assumptions d) All the above
13. Accounting conventions are
a) Debit and credit b) purchase and sales c) customs and traditions d) Profit and loss
14. Branch of accounting is/ are
a) Financial accounting b) cost accounting c) management accounting d) All the above
15. Rule of personal account is
a) Debit what comes in. credit what goes out
b) Debit the receiver. credit the giver
c) Debit all expenses and loss. Credit all incomes and gains
d) None of the above
16. Rule of Real account is
a) Debit what comes in. credit what goes out
b) Debit the receiver. credit the giver
c) Debit all expenses and loss. Credit all incomes and gains
d) None of the above
17. Rule of Nominal account is
a) Debit what comes in. credit what goes out
b) Debit the receiver. credit the giver
c) Debit all expenses and loss. Credit all incomes and gains
d) None of the above
18. Accounting period concept states
a) Accounts will be prepared once in 3 months
b) Accounts will be prepared once in a year
c) Accounts will be prepared for every 2 years
d) Accounts will be prepared for every 6 months
19. Matching concepts includes
a) Revenues and expenses
b) Assets and liabilities
c) Reserves and surplus
d) None of the above
20. Money measurement concept does not include
a) Honesty
b) Loyalty
c) Efficiency
d) All the above
21. Journal is a
a) Primary book b) Secondary book c) New book d) Cash book
22. Trail balance is a
a) Ledger b) Statement c) Subsidiary book d) Cash book
23. Ledger is a book of
a) Primary entry b) Secondary entry c) New entry d) Old Entry
24. Land is a
 a) Fixed asset b) Current asset c) intangible asset d) None of the above
25. Debtor is a
a) Asset b) Liability c) stationery d) expenses

26. Accounting is the process of

a) Identifying b) Measuring c) Recording d) All the above
27. Objective of Accounting is to
a) To know the profit and loss
b) To Know the financial position
c) To Make decisions
d) All the above
28. Canara bank Account is a
a) Personal account b) Real account c) Nominal account d) None of the above
29. Machinery is a
a) Nominal account b) Real account c) Personal account d) All the above
30. Commission is a
a) Real account b) Nominal account c) Personal account d) Current account
31. Debit the receiver, credit the giver is the rule of
a) Real account b) Personal account c) Nominal account d) savings account
32. Debit what comes in, credit what goes out is the rule of
a) Real account b) Personal account c) Nominal account d) savings account
33. Debit all expenses and losses, credit all incomes and gains is a rule of
a) Real account b) Personal account c) Nominal account d) savings account
34. Limitation of accounting is
a) Rigidity b) Flexibility c) easy to understand d) none
35. Dual aspect concept states
a) For every transactions there are debit and credit aspect
b) Only one aspect
c) Zero aspect
d) All the above
36. All the business transactions will be measured in terms of
a) Money b) Kilograms c) Liters d) Meters
37. Business entity concept states
a) Owner is separate from its business
b) Owner and business both are same
c) Both A and B
d) All the above
38. The concept of separate entity is applicable to which of the following types of business
a) Sole proprietorship
b) Corporation
c) Partnership
 d) All of the above
39. The going concern concept assumes that
a) The entity continue running for foreseeable future
b) The entity continue running until the end of accounting period
c) The entity close its operation in 10 years
d) The entity cannot be liquidated
40. American companies prepare their financial statement in dollars whereas as Japanese
Companies produce financial statement in Yen. This is an example of a
a) Stable monetary unit concept
b) Unit of measurement concept
c) Money value concept
d) Current value concept
41. Amount invested by the proprietor should be credited to
a) A/c payable b) Capital c) Cash d) Drawing
42. Transactions are first recorded in which book/ account?
a) Book of original entry
b) T accounts
c) Accounting equation
d) Book of final entry
43. Journal is also called as a?
a) A day book
b) History book
c) Ledger book
d) An entry book
44. Good returned by customer will be debited to which account ?
a) Purchase A/c
b) Purchase return A/c
c) Sales Return A/c
d) Customer A/c
45. Journal list transactions in which order?
a) Decreasing
b) Chronological
c) Alphabetical
d) Increasing
46. A ledger is called a book of.
a) Primary entry
b) Final entry
c) Original entry
d) None of the above
47. The process of transferring of items from a journal to their respective ledger accounts is called as
a) Entry b) Arithmetic c) Balancing d) Posting
48. The left hand side of the ledger account is referred to as.
 a) Footing b) Credit side c) Debit side d) Balance
49. Which of the following is used for checking the arithmetical accuracy of books of account?
a) Ledger b) Trial balance c) Journal d) All the above
50. Which of the methods is used to create a trial balance?
a) Computed method
b) Total method
c) Balance method
d) All of the Above

51. Cash, goods, or assets invested by the proprietor in the business for earning profit is called
______.
(a) Profit
(b) Capital
(c) Fixed assets
(d) None of these
52. The process of recording, classifying, and summarising all business transactions in order to know
the financial result is called ______.
(a) Bookkeeping
(b) Accounting
(c) Journalising
(d) None of these
53. Which of the following is not a business transaction?
(a) Bought furniture of Rs. 10,000 for business
(b) Paid for salaries of employees Rs. 5,000
(c) Paid son’s fees from her personal bank account Rs. 20,000
(d) Paid son’s fees from the business Rs. 2,000
54. 9. The art of recording all business transactions in a systematic manner in a set of books is called
_____.
(a) Accounting
(b) Bookkeeping
(c) Ledger
(d) None of these
55. From which of the following is a ledger account prepared.
(a) Transactions
(b) Journal
(c) Events
(d) None of the above
56. The ledger column that links the entry with the journal is called as.
(a) J.F column
(b) L.F column
(c) Credit column
(d) Debit column
57. Ledger is a principal book that contains.
(a) Real accounts only
(b) Personal accounts only
(c) All accounts
(d) Nominal accounts only
58. Accounts that have credit balance are closed by using the statement.
(a) By balance b/d
(b) By balance c/d
(c) To balance b/d
(d) To balance c/d
59. If a trial balance totals do not agree, the difference must be entered in
A) The Profit and Loss Account
B) A Nominal Account
C) The Capital Account
D) A Suspense Account
60. Which concept states that “for every debit, there is a credit”?
(a) Money Measurement Concept
(b) Accounting Period Concept
(c) Separate Entity Concept
(d) Dual Aspect Concept
61. Due to which concept, accounting does not record non-financial transactions?
(a) Going concern concept
(b) Money measurement concept
(c) Accrual concept
(d) Cost concept
62. Good will is classified as which one of the following assets?
(a) Fixed b) long term c) Current d) Intangible
63. Furniture is shown on which side of balance sheet

a) Liabilities b) Assets c) Both d) None

64. Which of the following is shown on liabilities side of balance sheet

a) Cash b) Stock c) Creditors d) Machinery

65. Good will is a -----------

a) Tangible asset b) Intangible asset c) Current assetd) None of these

66. Bank overdraft is a -------

a) Asset b) Liability c) Expenses d) Income

67. The process of transferring from journal to ledger is known as

a) Posting b) Ledger c) purchase book d) Sales book

68. Brief explanation of Journal entry known as

a) Sales book b) Narration c) cash d) None of these

69. What is a bank reconciliation statement?

a) A statement that shows the transactions made by the bank.

b) A statement that reconciles the differences between the bank balance in the company's books and
the bank statement.

c) A statement that calculates interest earned on savings accounts.

d) A statement used for calculating depreciation.

70. What is the purpose of a bank reconciliation statement?

a) To compare the bank's transactions with the company's transactions.

b) To calculate the interest earned on a savings account.

c) To track employee salaries.

d) To prepare financial statements.