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Accounting Basics MCQ Commerce

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About Accounting Basics

Following are some of the multiple choice questions on the Accounting Basics with answers that will help the students in developing their knowledge.

Accounting Basics MCQ

1. Expense is debit or credit ?

debit
credit

2. A bank reconciliation statement is prepared by?

Banker
Accountant of the business
Auditors
Registrars

3. The main purpose of preparing a bank reconciliation statement is?

Part of a Bank Statement
Part of the Cash Book
A separate statement
A sub-division of a journal

4. What are source documents?

these are the small track of transaction.
these are used to keep the business running
they are the small proof that the transaction did happen.
small documents

5. Diterima pendapatan jasa bengkel Rp 250.000jurnal nya adalah...

pendapatan jasa (D), kas(K) Rp 250.000
kas (D), piutang (K) Rp 250.000
kas (D), pendapatan jasa (K) Rp 250.000
piutang (D), kas(K) Rp 250.000

6. The bone building cells.

Osteoclasts
Osteocytes
Osteoblasts
osteocalcin

7. Accounting entries involve a minimum of how many accounts?

One
Two
Three
Four

8. One of the following is an example of materiality concept:

Purchase of pencil recorded as an expense instead of including in stock
Purchase of car for private use
Purchase of plant for business
Purchase of building to extend the business

9. Unearned Revenues is what type of account?

Asset
Liability
Stockholders' Equity
None of these

10. The petty cash fund is a liability with a normal debit balance.

True
False

11. Uncollected cheques are also known as?

Outstanding cheques
Uncleared cheques
Outstation cheques
Both A & B

12. The business or economic entity concept is applicable to

sole proprietorship form of business
partnership form of business
corporate form of business
all of the above

13. Unfavourable balance means?

Credit balance in cash book
Credit balance in bank statement
Debit balance in cash book
Debit balance in petty cash book

14. Favourable balance means?

Credit balance in the cash book
Credit balance in the bank statement
Debit balance in cash book
Both B & C

15. The accounting equation is

Assets = Liabilities + Owner's Equity
Assets = Liabilities - Owner's Equity
Assets - Owner's Equity + Liability
None of these

16. Switching accounting principles every year would violate the

money measurement principle
consistency principle

17. Assets taken out of a business for the owner's personal use

capital
withdrawals
equities
revenue

18. Entries to revenues accounts such as Service Revenues are usually

Debits
Credits

19. The accrual concept is the accounting rule requiring that whenever possible the amounts used in recording transactions be based on objective evidence rather than on subjective judgements.

True
False

20. Entries to expenses such as Rent Expense are usually

Debits
Credits

21. Anything of value that is owned

account
asset
withdrawal
expense

22. A decrease in owner's equity resulting from the operation of a business

account
capital
asset
expense

23. Investment by owner

Dr. Cash Cr. Revenue
Dr. Owner's Capital Cr. Cash
Dr. Cash Cr. Accounts Receivable
Dr. Cash Cr. Owner's Capital

24. To which account in the Balance Sheet is the net income or net loss transferred to at the end of the accounting period?

Retained Earnings
Cash
Accounts Receivable
Inventory

25. When cash is received, the account Cash will be

Debited
Credited

26. Liabilities often have the word __________ in their account title.

Assets
Payable
Paid
Equity

27. What will usually cause an asset account to increase?

Debit
Credit

28. Assets are usually reported on the balance sheet at which amount?

Cost
Current Market Value
Expected Selling Price
None of These

29. A business owned by one person

service business
revenue
expense
proprietorship

30. The balance on the debit side of the bank column of cash book indicates?

The total amount that has been drawn from the bank
Cash at bank
The total amount overdraft in the bank
None of above

31. Amount owed by a business

liability
asset
capital
account

32. Which of the following are Assets?

Bank Account
Vehicles
Furniture and fittings
All of above

33. Concept: When a business activity is large enough to impact business decisions, it should be recorded clearly in the financial statements

realization of revenue
materiality
unit of measurement
consistent reporting

34. Under the accrual basis of accounting, revenues are reported in the accounting period when the:

Cash is Received
Service or Goods Have Been Delivered
End of the Month Has Arrived
Customer Pays

35. When a company pays a bill, the account Cash will be

Debited
Credited

36. What will usually cause the liability account Accounts Payable to increase?

Debit
Credit

37. Accrual concept is based on :

matching principle
dual aspect principle
cost principle
going concern concept

38. The economic entity assumption states that economic events can be identified with a particular unit or accountability.

True
False

39. Things you own are asset or liability

Asset
Liability

40. A balance sheet reports a business's financial

Condition over a specific period of time
Progress over a specific period of time
Condition on a specific date
Progress on a specific date

41. A petty cash fund is always replenished

daily.
weekly.
at the end of the month.
none of these.

42. What is the difference between cash and credit transaction?

credit no cash involved
you pay in cash
you buy witout using cash
none of the above

43. Financial reports that summarize the financial condition and operations of a business

financial statements
ethics
withdrawals
equities

44. The account used to summarize the owner's equity in a business

account
expense
capital
revenue

45. The amount in an account

account title
revenue
account balance
accounting records

46. An increase in owner's equity resulting from the operation of a business

asset
expense
withdrawl
revenue

47. How would an accountant record an increase in sales?

debit
credit

48. How would an accountant record an increase in cash?

Debit
Credit

49. Explain a measure to improve collection from debtors

offer discounts for early payments
charge interest
set credit limit
threatening

50. If I take home $500 for personal use from my business which transactions will I carry out

Decrease bank Column by - $500
Decrease Equity by - $500
Increase Equity by + $500
Both A & B

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