*Which one is the principle of Double Entry System?

[a] Purchase increases Debit, income decreases Credit

[b] Expense increases Debit, Income decreases Credit
[c] Receiver is Debit and Giver is Credit
[d] Receiver is Credit and Giver is Debit

* Which of the following account will be credited, if business bought goods on

credit from Mr. Z

A) Purchases account B) Mr. account C) Cash account D) Sales account

* Interest on loan paid by business is an example of :

A) Revenue expense B) Income (C) Asset (D) Return outward

* Which of the following account will be credited when a typewriter is sold that
has been used in the office?

A) Office Equipment Account B) Cash Account C) Sales A/c D) Purchase A/c

* 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

6.Which of the following is the normal balance of a rent expense account?

A) Credit balance B) Cash balance C) Overdraft D) Debit balance

7.Revenue and expense accounts are referred as

A) Nominal accounts B) Real account C) Cash accounts d) Banks account

8.The real accounts are accounts of Assets, liabilities and ________

A) Expenses B) Revenues C) Capital d) Drawing

9.Building account is classified as _________ account

A) Nominal B) Real C) Cash D) Capital

10) Office equipment’s account is classified as _________ account

A) Nominal B) Real C) Cash D) Capital

11) ___________ helps business to classify transactions according to their nature

A) General journal B) Real accounts C) Ledger accounts) Cash accounts

12) Which of the following is a real account?

A) Office equipment B) Rent expenses C) Rent income D) Insurance expense

13)Which of the following accounts are closed at the end of an accounting

period?

A) Nominal accounts B) Balance sheet accounts C) Real a/c D) None

14 )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

 _________ is the evidence that a transaction took place

A) Source documents B) Ledger C) Bond D) Journals

 Which of the following will be debited if a business purchases goods on

credit?

A) Cash B) Debtor C) Creditor D) Purchases

 Which of the following accounts will be debited if the business's owner

withdraws cash from business for his personal use?

A) Drawings B) Cash C) Business D) Stock

 Journals are also referred as

A) Book of entries B) Book of original entries C) T account D) Books

of economic event

 The standard format of journal does not include which of the following?

A) Assets column B) Date column C) Description columnD) Amount column

In which of the following orders data is entered in journal?

A) Alphabetical order B) Numeric order C) Bullets order D) Chronological order

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

Discount for quick repayment of debt is normally referred as

A) Trade discount B) Prompt payment discount C) Cash discountD) Bulk

discount

The first step in accounting process is

A) Recording the transaction B) Identifying the transaction

C) Posting the transaction D) Preparing the source documents

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

Transferring entries from journal to ledger account is commonly known as

A) Recording B) Transferring C) Posting) Entry making

An account records the ___________ in the balance of an item

A) Increase B) Decrease C) Increase or decrease D) Appreciation

_________ will be credited if goods are given as charity

A) Cash B) Charity C) Purchases) Sales

Which of the following is known as the base for preparing trial balance?

A) Journal B) Cash account C) Ledger account) Balance sheet

If debit balance is greater than credit balance then the account balance will be:

A) Credit balance B) Debit and credit balance C) Cash balance D) Debit balance

The normal balance of capital account is

A) Credit balance B) Debit balance C) Cash balance D) Neither debit nor credit
b
* The normal balance of asset account is
A) Credit balance B) Debit balance C) Cash balance D) Neither debit nor credit

* The normal balance of liability account is

A) Debit balance B) Credit balance C) Cash balance d) Neither debit nor credit

* 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

*Cash received for services rendered will

a) Increase cash and liability b) Increase cash and equity

c) Increase fixed assets and cash d) Increase equity and liability

* Which of the following will be debited if a business purchases goods on credit?

a) Cash b) Debtors c) Creditors d) Purchases

* Transactions that a business doesn't record in any specialized journal are

recorded in which of the following journals or daybooks?

a) Cash payments journal b) Cash receipts journal c) Purchases return journal

d) General journal

* 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

* 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