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BEST HIGHER SECONDARY SCHOOL

MCQ TEST- ACCOUNTANCY- XI MARKS 50

The company maintains provision for bad debts at 5% and its outstanding debtors at the end of the year was 3.00,000. During the
year, opening balance ofprovision for bad debt was 5,000 and bad debt during
the year was 10,000. The debit to profit and loss account for the year ended in respect of provision for
debtors will be:
(a) 50,000
(b) 25,000
(c) 20,000
(d) 15.000

1.

2. Goodwill is :
(A) Current Asset (B) Tangible Asset

(C) Intangible Asset (D) Fictitious Asset

3. Choose the Current Assets from the following :


(A) Cash
(B) Stock
(C) Debtors
(D) All of these
4. "Salaries and Wages" appearing in Trial Balance is shown :
(a) On the Debit Side of Trading A/c
(b) On the Debit Side of P & L A/c
(c) On the Asset Side of Balance Sheet
(d) On the Liabilities Side of Balance Sheet
5. Opening Capital
Closing Capital
Net profit during the year
The trader has
(a) Drawings of 7 20,000
(b) Brought additional capital of 7 30,000
(c) Brought additional capital of 7 40,000 (d) Both (a) and (c)
6. While making an adjusting entry in respect of closing stock, we debit
(a) Closing stock (b) Trading account (c) Purchases account

80,000
1,20,000
20,000

(d) Sales account

7. While making an adjusting entry in respect of interest on capital, we credit:


(a) Interest on capital account
(b) Capital account
(c) Profit and loss account
(d) Drawing
account
8. Trading account is a
(a) Personal account
(b) Nominal account
(c) Real account
(d) None of these
9. The withdrawal of goods from the business by the proprietor should be debited to:
(a) Drawings account
(b) Purchases account
(c) Capital account
(d) P&L A/c
10. Balance of Petty Cash is :
(A) Expenses

(B) Income (C) Liability

(D) Asset

11. Trade discount allowed on the sales, if appearing in the trial balance, is shown in the final accounts :
(a) On the debit side of trading account
(b) On the debit side of the profit and loss account
(c) By way of deduction from the sales in the trading account
(d) Credit of P&L A/c
12. Income Tax paid by a sole trader is shown:
(a) On the debit side of the trading account

(b) On the debit side of profit and loss account


(c) By way of deduction from the capital in the balance sheet
(d) On Asset side of the B/S
13. The company maintains provision for bad debts at 5% and its outstanding debtors at the end of the year was 3.00,000. During the year,
opening balance of provision for bad debt was 5,000 and bad debt during the year was 10,000. The debit to profit and loss account for the
year ended in respect of provision for debtors will be:
(a) 50,000
(b) 25,000
(c) 20,000
(d) 15.000
14. Opening balance of debtors is 18,000. 5% provision for bad debt is required to be provided on debtors.If the debtors balance is
increased during the year by 5.000 and the provision for bad debt has a debit balance of 350 after transferring bad debts, the charge
against the profit and loss account is:
(a) 1,950
(b) 1,500
(c) 650
(d) 550
15. Which of the following is an example of an adjusting entry ?
(a) Recording the purchase of goods on account
(b) Recording depreciation of a truck
(c) Recording the billing of customers for services rendered
(d) Recording the payment of wages to employees
16. An adjusting entry to accrue wages earned but not yet paid is an example of:
(a) Adjusting recorded costs with the appropriate accounting periods
(b) Adjusting recorded revenue with the appropriate accounting periods
(c) Reflecting unrecorded expenses incurred during the accounting period
(d) Reflecting unrecorded revenue earned during the accounting period.
17. Which one of the following statements is correct ?
(a) Gross profit on trading is entered on the right side of the trading account and carried outside of the profit and loss account
(b) Gross profit on trading is entered on the left side of the trading account and carried down side of the profit and loss account ..
(c) Net profit on trading is entered on the right side of the trading account and carried down side of the profit and loss account
(d) Net profit on trading is entered on the left side of the trading account and carried down to side of the profit and loss account
18. After all closing entries have been posted, the balance of the P & L Account will be:
(a) A debit if a net income has been earned
(b) A debit if a net loss has been incurred
(c) A credit if a net loss has been incurred
(d) Zero
19. Fixed assets are :
(a) kept in the business for use over a long period
(b) meant for conversion into cash as quickly as possible
(c) meant for resale
(d) fictitious assets
20. Building is :
(a) Current asset (b) Tangible asset (c) Intangible asset (d) Fictitious asset
21. Choose the current assets from the following :
(a) Cash
(b) Stock (c) Debtors
(d) All of these
22. Closing stock appearing in the Trial Balance is shown :
(a) Cm the Dr. side of Trading A/c
(b) On the Cr. side of Trading A/c
(c) On the Assets side of Balance Sheet
(d) On the Cr. side of Trading A/c and on the assets side of Balance Sheet
23. If 'Prepaid Wages' is given in Trial Balance, it is shown in :
(a) Debit of Trading A/c (b) Debit of Trading A/c and Assets side of B/S
(c) Debit of P&LA/c (d) Assets side of the B/S
24. Outstanding salary is :
(a) Real Account
(b) Personal Account
(c) Nominal Account
(d) Either (a) or (b)
25. Capital on 1 January 65,000, Interest on drawing 5,000, Interest on capital 2,000, Drawings 14000
Profit for the year 15.000, His capital as on 31 December will be:
(a) 67,000
(b) 63,000
(c) 77,000
(d) 89,000

C's Trial Balance contains the following information: Bad debts 8.000, Provision for Doubtful debts 6,000, Sundry
debtors
25,000. It is desired to create a provision for bad debts at 10% on sundry debtors at the end of the year. Sundry debtors (after
provision) will appear in the Balance Sheet at a figure
(a) 22,500 (b) 21,000 (c) 18,000
(d) 15,500
27. A Trial Balance contains the following information :
Bad debts
5,000
Discount allowed
4,000
Provision for discount on debtors
2,000
Provision for Doubtful debts
5,000
Sundry Debtors
50,000
At the end of the year, it is desired to maintain a provision for debts at 4.000 and provision for discount reserve
on debtors at 2,000. Sundry Debtors (after provision) will appear in the Balance Sheet at a figure : (a) 44,000
(b) 38,000
(c) 44,700
(d) 32,300
28. A Trial Balance as at 31st December contains the following information: 12% Bank loan 50,000, Interest paid 3,800. Interest
debited to the Profit and Loss Account is :
(a) 6,000 (b) 2,200 (c) 9,800
(d) 4,800
29. Return outwards appearing in Trial Balance are deducted from :
(a) Sales (b) Purchases (c) Returns Inwards
(d) Closing Stock
30. Return Inwards appearing in Trial Balance are deducted from :
(a) Purchases (b) Sales (c) Returns Outward (d) Closing Stock
31. Salaries and Wages appearing in Trial Balance are shown :
(a) on the debit side of Trading Account jig (b) on the debit side of Profit and Loss Account
(c) on the liabilities side of the Balance Sheet (d) on the assets side of the Balance Sheet
32. Wages and salaries appearing in Trial Balance are shown :
(a) on the debit side of Profit and Loss Account
(b) on the debit side of Trading Account
(c) on the liabilities side of the Balance Sheet
33. Freight inward appearing in Trial Balance Sheet is shown:
(a) on the debit side of Profit and Loss Account (b) on the debit side of Trading Account
(c) on the credit side of Trading A/c
(d) on the liabilities side of the Balance Sheet
34. Carriage outwards appearing in the Trial Balance are shown :
(a) on the debit side of Profit and Loss Account
(b) on the debit side of Trading Account
(c) on the liabilities side of the Balance Sheet
(d) on the credit side of P&L A/c
35. The Trial Balance shows Opening stock 50.000. It is
(a) Debited to the Trading Account
(b) Debited to the Profit and Loss Account
(c) Deducted from the closing stock in the Balance Sheet
(d) Shown as an asset
36. Trial Balance contains the following information: Bad debts 2,000, Provision for Doubtful debts
1,500. It is desired to make a Provision for Doubtful Debts of 2,000 at the end of the year. The amount
to be debited to the Profit and Loss Account is :
( a ) 5,500
(b) 6,000
(c) 2,500
(d) 4,500
37.
A Trial Balance provides you the following information: Bad debts 800, Provision for Doubtful debts
3,000. It is desired to maintain a Provision for Doubtful debts of 1,000. The accounting treatment of
these adjustments is :
(a) 1,800 to be debited to the Profit and Loss Account
(b) 1,200 to be credited to the Profit and Loss Account :
(c) 1,200 to be debited to the Profit and Loss Account
(d) 4,800 to be debited to the Profit and Loss Account
38. A Trial Balance contains the following information: Discount allowed 1,500. Provision for discount on
debtors 1,100. It is desired to make a provision for discount on debtors of 1,800 at the end of the year.
The amount to be debited to the Profit and Loss Account is :
(a) 2,200
(b) 4,200 (c) 1,700
(d) 3,200
39. In a trial balance, debtors appearat45,000. Provision for doubtful debtsat5%to be made after considering the following adjustments :
1. An amount of 1,000 is included in debtor who is bankrupt and his estate is expected to realize 50 (fifty) paise in the rupee.
26.

2. Debtors include an amount of 2,000 for goods supplied to proprietor.


3. Bills receivable include dishonoured bill for 1,000.
4. Goods sold in 'Sale or Return' basis not approved by the customer for 5,000 recorded as sale.
5. Debtors include an amount of 500 from a customer whose financial position is doubtful..
The total provision to be made for doubtful debts is:
.
(a) 1,900
(b) 2,250
(c) 2,425
(d) 2,875
40. P's trial balance contains the following information :
Bad debts, 3,000
Provision for bad debts 3,500
It is desired to make a provision of 4,000 at the end of the year. The amount to be debited to profit and loss a/c is:
(a) 4,000
(6) 5.000
(c) 6,500
(d) 3,500
41. All those to whom business owes money are:
(a) Debtors (b) Investors(c) Creditors
(d) Shareholders
42. Outstanding salaries are shown as :
(a) An asset in the balance sheet
(b} A liability
(c) By adjusting it in the P & L A/c
(d) Both (a) and (c)
(e) Both (b) and (c)
43. Rent prepaid is shown as
(a) Current asset
(b) Current liability
(c) Fixed asset
(d) Income
44. A club paid subscription fees of 1,400, out of which 200 is prepaid. In such case
(a) P&L A/c is debited with 1,400
(b) P&L A/c is debited with t 1,200
(c) 200 is shown as current asset
(d) Both (b) and (c) (e) Both (a) and (c)
45. Bank overdraft is a
(a) Current liability
(b) Contingent liability
(c) Current asset
(d) Unsecured loan
46. Which of the following relationships is / are false
(a) Net profit = Gross profit - Administration and other expenses
(b) Net profit = Gross profit + Administration expenses and other expenses
(c) Opening stock + Purchase - Closing stock = Cost of sales
(d} Opening stock + Purchase + Gross profit + Direct expenses - Closing stock = Sales
47. Which of the following are / is not a fixed asset
(a) Stock
(b) Vehicle
(c) Fixed deposit in bank
(d) Both (a) and (c) (e) Both (b) and (c)
48. Which of the following are / is a current asset
(a) Sundry debtors
(b) Stock
(c) Prepaid insurance
(d) Both (a) and (b) (e) All of (a), (b) and (c)
49. On 1st January, 1999, the balances on different accounts in the books of Bhushan were as follows: Stock
on hand 3,500; Investments 3,000; Loans from Ramji 3,500; Owing by debtors 2,500; Owing to
creditors 1,500; Plant and Machinery 3,000; Bills payable 1,250; Cash at bank 2,000.
The amount of capital of Bhushan on this date was
(a) 750
(6) 1,750
(c) 2,750
(d) 7,750
50. The balance sheet gives information regarding the
(a) Results of operations for a particular period
(b) Financial position during a particular period
(c) Profit earning capacity for a particular period
(d) Financial position as on a particular date