📘 Chapter 1: Introduction to Accounting (20 MCQs)
Q1. Accounting is concerned with?
A. Recording
B. Classifying
C. Summarizing
D. All of these
✅ Ans: D
Q2. Accounting provides information to?
A. Owners
B. Creditors
C. Investors
D. All
✅ Ans: D
Q3. Accounting is called language of?
A. Science
B. Business
C. Arts
D. Maths
✅ Ans: B
Q4. Internal users include?
A. Creditors
B. Government
C. Managers
D. Banks
✅ Ans: C
Q5. External users include?
A. Managers
B. Employees
C. Investors
D. Owners
✅ Ans: C
Q6. Accounting records transactions in terms of?
A. Units
B. Money
C. Time
D. Quantity
✅ Ans: B
Q7. Book-keeping is?
A. Complete accounting
B. Part of accounting
C. Not related
D. None
✅ Ans: B
Q8. Objective of accounting is?
A. Profit calculation
B. Financial position
C. Information
D. All
✅ Ans: D
Q9. Accounting is useful for?
A. Decision making
B. Planning
C. Control
D. All
✅ Ans: D
Q10. Limitation of accounting is?
A. Ignores qualitative info
B. Based on estimates
C. Both
D. None
✅ Ans: C
Q11. Accounting data is?
A. Exact
B. Estimated
C. Both
D. None
✅ Ans: C
Q12. Financial statements include?
A. Trading A/c
B. P&L A/c
C. Balance Sheet
D. All
✅ Ans: D
Q13. Accounting information should be?
A. Relevant
B. Reliable
C. Comparable
D. All
✅ Ans: D
Q14. Accounting helps in?
A. Profit analysis
B. Cost control
C. Budgeting
D. All
✅ Ans: D
Q15. Qualitative characteristic includes?
A. Reliability
B. Relevance
C. Understandability
D. All
✅ Ans: D
Q16. Accounting period is?
A. Lifetime
B. One year
C. Two years
D. None
✅ Ans: B
Q17. Accounting is an art of?
A. Recording
B. Classifying
C. Summarizing
D. All
✅ Ans: D
Q18. Which is not user?
A. Manager
B. Creditor
C. Customer
D. None
✅ Ans: C
Q19. Accounting is related to?
A. Business
B. Non-business
C. Both
D. None
✅ Ans: C
Q20. Output of accounting is?
A. Journal
B. Ledger
C. Financial statements
D. Cash book
✅ Ans: C
📘 Chapter 2: Theory Base of Accounting (20 MCQs)
Q1. Business entity concept means?
A. Owner = Business
B. Separate entity
C. No relation
D. None
✅ Ans: B
Q2. Dual aspect concept shows?
A. One side
B. Two sides
C. Three sides
D. None
✅ Ans: B
Q3. Accounting equation is?
A. Assets = Liabilities
B. Assets = Capital
C. Assets = Liabilities + Capital
D. None
✅ Ans: C
Q4. Money measurement concept ignores?
A. Money
B. Non-monetary items
C. Assets
D. Liabilities
✅ Ans: B
Q5. Going concern means?
A. Closing business
B. Continuity
C. Loss
D. None
✅ Ans: B
Q6. Cost concept means?
A. Market value
B. Purchase price
C. Selling price
D. None
✅ Ans: B
Q7. Accounting period concept refers to?
A. Life
B. Time period
C. Event
D. None
✅ Ans: B
Q8. Matching concept means?
A. Match assets
B. Match expenses with revenue
C. Match capital
D. None
✅ Ans: B
Q9. Revenue recognition concept deals with?
A. Expense
B. Income
C. Loss
D. None
✅ Ans: B
Q10. Conservatism concept means?
A. Overstate profit
B. Understate loss
C. Record expected losses
D. None
✅ Ans: C
Q11. Consistency means?
A. Change methods
B. Same methods
C. No method
D. None
✅ Ans: B
Q12. Full disclosure concept means?
A. Hide info
B. Show all material info
C. Ignore
D. None
✅ Ans: B
Q13. Materiality concept refers to?
A. Important items
B. All items
C. Small items
D. None
✅ Ans: A
Q14. Accounting standards ensure?
A. Uniformity
B. Confusion
C. Error
D. None
✅ Ans: A
Q15. GAAP stands for?
A. General Accounting Principles
B. Generally Accepted Accounting Principles
C. General Accepted Practices
D. None
✅ Ans: B
Q16. Historical cost concept is?
A. Future value
B. Past cost
C. Market value
D. None
✅ Ans: B
Q17. Accrual concept means?
A. Cash basis
B. Record when earned
C. Ignore
D. None
✅ Ans: B
Q18. Objectivity concept means?
A. Personal opinion
B. Evidence based
C. Guess
D. None
✅ Ans: B
Q19. Accounting principles are?
A. Rules
B. Guidelines
C. Laws
D. None
✅ Ans: B
Q20. Which concept divides life into periods?
A. Going concern
B. Accounting period
C. Matching
D. None
✅ Ans: B
📘 Chapter 3: Recording of Transactions – I (Journal) (20 MCQs)
Q1. Journal is known as?
A. Secondary book
B. Original book
C. Ledger
D. None
✅ Ans: B
Q2. Journal entry is recorded in?
A. Ledger
B. Cash book
C. Journal
D. Trial balance
✅ Ans: C
Q3. Debit is recorded on?
A. Right side
B. Left side
C. Both
D. None
✅ Ans: B
Q4. Credit is recorded on?
A. Left
B. Right
C. Both
D. None
✅ Ans: B
Q5. Personal account rule is?
A. Debit receiver
B. Credit giver
C. Both
D. None
✅ Ans: C
Q6. Real account rule is?
A. Debit what comes in
B. Credit what goes out
C. Both
D. None
✅ Ans: C
Q7. Nominal account rule is?
A. Debit expenses
B. Credit income
C. Both
D. None
✅ Ans: C
Q8. Purchase of goods for cash?
A. Debit purchase
B. Credit cash
C. Both
D. None
✅ Ans: C
Q9. Sale of goods on credit?
A. Debit debtor
B. Credit sales
C. Both
D. None
✅ Ans: C
Q10. Cash withdrawn for personal use?
A. Drawings debit
B. Cash credit
C. Both
D. None
✅ Ans: C
Q11. Salary paid?
A. Salary debit
B. Cash credit
C. Both
D. None
✅ Ans: C
Q12. Goods returned?
A. Purchase return
B. Sales return
C. Both
D. None
✅ Ans: A
Q13. Discount allowed is?
A. Income
B. Expense
C. Asset
D. None
✅ Ans: B
Q14. Discount received is?
A. Income
B. Expense
C. Liability
D. None
✅ Ans: A
Q15. Capital introduced?
A. Cash debit
B. Capital credit
C. Both
D. None
✅ Ans: C
Q16. Journal entry includes?
A. Date
B. Amount
C. Narration
D. All
✅ Ans: D
Q17. Narration explains?
A. Amount
B. Transaction
C. Date
D. None
✅ Ans: B
Q18. Compound entry means?
A. One debit one credit
B. Multiple accounts
C. No entry
D. None
✅ Ans: B
Q19. Which account is debited for rent paid?
A. Rent
B. Cash
C. Capital
D. None
✅ Ans: A
Q20. Which account is credited for income received?
A. Income
B. Cash
C. Capital
D. None
✅ Ans: A
📘 Chapter 4: Recording of Transactions – II (Ledger) (20 MCQs)
Q1. Ledger is?
A. Book of original entry
B. Book of accounts
C. Cash book
D. None
✅ Ans: B
Q2. Posting means?
A. Recording
B. Transferring entries
C. Balancing
D. None
✅ Ans: B
Q3. Ledger contains?
A. Accounts
B. Transactions
C. Cash
D. None
✅ Ans: A
Q4. Balance means?
A. Total
B. Difference
C. Entry
D. None
✅ Ans: B
Q5. Debit balance means?
A. Debit > Credit
B. Credit > Debit
C. Equal
D. None
✅ Ans: A
Q6. Credit balance means?
A. Debit > Credit
B. Credit > Debit
C. Equal
D. None
✅ Ans: B
Q7. Ledger folio means?
A. Page number
B. Amount
C. Date
D. None
✅ Ans: A
Q8. Cash account balance is?
A. Debit
B. Credit
C. Nil
D. None
✅ Ans: A
Q9. Capital account balance is?
A. Debit
B. Credit
C. Nil
D. None
✅ Ans: B
Q10. Drawings account is?
A. Asset
B. Expense
C. Deduction from capital
D. None
✅ Ans: C
Q11. Purchase account is?
A. Asset
B. Expense
C. Income
D. None
✅ Ans: B
Q12. Sales account is?
A. Income
B. Expense
C. Asset
D. None
✅ Ans: A
Q13. Balancing is done at?
A. End of period
B. Start
C. Daily
D. None
✅ Ans: A
Q14. Closing balance is carried to?
A. Journal
B. Trial balance
C. Cash book
D. None
✅ Ans: B
Q15. Ledger is prepared after?
A. Journal
B. Trial balance
C. Balance sheet
D. None
✅ Ans: A
Q16. Posting from journal is done to?
A. Ledger
B. Cash book
C. Trial balance
D. None
✅ Ans: A
Q17. Number of sides in ledger account?
A. One
B. Two
C. Three
D. None
✅ Ans: B
Q18. Which account has no credit balance?
A. Cash
B. Capital
C. Sales
D. None
✅ Ans: A
Q19. Balance c/d means?
A. Carried down
B. Carried forward
C. Closing
D. None
✅ Ans: A
Q20. Balance b/d means?
A. Brought down
B. Balance down
C. None
D. Both
✅ Ans: A
📘 Chapter 5: Bank Reconciliation Statement (20 MCQs)
Q1. BRS is prepared for?
A. Profit
B. Matching balances
C. Expenses
D. None
✅ Ans: B
Q2. Passbook is prepared by?
A. Customer
B. Bank
C. Auditor
D. None
✅ Ans: B
Q3. Cash book is maintained by?
A. Bank
B. Customer
C. Auditor
D. None
✅ Ans: B
Q4. Cheque issued but not presented?
A. Add
B. Less
C. Ignore
D. None
✅ Ans: A
Q5. Cheque deposited but not cleared?
A. Add
B. Less
C. Ignore
D. None
✅ Ans: B
Q6. Bank charges appear in?
A. Cash book
B. Passbook
C. Both
D. None
✅ Ans: B
Q7. Interest credited by bank?
A. Add
B. Less
C. Ignore
D. None
✅ Ans: A
Q8. Direct deposit by customer?
A. Add
B. Less
C. Ignore
D. None
✅ Ans: A
Q9. Overdraft means?
A. Debit balance
B. Credit balance
C. Zero
D. None
✅ Ans: B
Q10. Dishonour of cheque?
A. Add
B. Less
C. Ignore
D. None
✅ Ans: B
Q11. Timing difference causes?
A. Difference
B. Error
C. Profit
D. None
✅ Ans: A
Q12. BRS helps to?
A. Detect errors
B. Fraud detection
C. Both
D. None
✅ Ans: C
Q13. Passbook debit means?
A. Withdrawal
B. Deposit
C. Both
D. None
✅ Ans: A
Q14. Passbook credit means?
A. Withdrawal
B. Deposit
C. Both
D. None
✅ Ans: B
Q15. NSF cheque means?
A. Dishonour
B. Honour
C. Ignore
D. None
✅ Ans: A
Q16. BRS is prepared at?
A. End
B. Start
C. Anytime
D. None
✅ Ans: C
Q17. Bank errors include?
A. Wrong entry
B. Omission
C. Both
D. None
✅ Ans: C
Q18. Cash book overdraft balance is?
A. Debit
B. Credit
C. Nil
D. None
✅ Ans: B
Q19. Bank reconciliation is?
A. Statement
B. Account
C. Ledger
D. None
✅ Ans: A
Q20. Main objective of BRS?
A. Match balances
B. Profit
C. Loss
D. None
✅ Ans: A
📘 Chapter 6: Trial Balance (20 MCQs)
Q1. Trial Balance is?
A. Account
B. Statement
C. Ledger
D. Journal
✅ Ans: B
Q2. Trial Balance is prepared to?
A. Find profit
B. Check accuracy
C. Record entries
D. None
✅ Ans: B
Q3. Trial Balance is prepared from?
A. Journal
B. Ledger
C. Cash book
D. None
✅ Ans: B
Q4. Trial Balance contains?
A. Debit only
B. Credit only
C. Both
D. None
✅ Ans: C
Q5. If Trial Balance agrees, it means?
A. No error
B. Errors may exist
C. Profit correct
D. None
✅ Ans: B
Q6. Trial Balance helps in?
A. Detect errors
B. Prepare final accounts
C. Both
D. None
✅ Ans: C
Q7. Suspense account is used when?
A. No error
B. Difference occurs
C. Profit
D. None
✅ Ans: B
Q8. Trial Balance is prepared at?
A. Start
B. End
C. Middle
D. None
✅ Ans: B
Q9. Which is not shown in Trial Balance?
A. Assets
B. Liabilities
C. Transactions
D. Capital
✅ Ans: C
Q10. Cash balance is?
A. Debit
B. Credit
C. Both
D. None
✅ Ans: A
Q11. Capital balance is?
A. Debit
B. Credit
C. Both
D. None
✅ Ans: B
Q12. Purchases account shows?
A. Debit
B. Credit
C. Both
D. None
✅ Ans: A
Q13. Sales account shows?
A. Debit
B. Credit
C. Both
D. None
✅ Ans: B
Q14. Trial Balance is based on?
A. Single entry
B. Double entry
C. None
D. Both
✅ Ans: B
Q15. Debit total equals credit total due to?
A. Accounting concept
B. Dual aspect
C. Both
D. None
✅ Ans: C
Q16. Which error is not detected?
A. Omission
B. Commission
C. Compensating
D. All
✅ Ans: D
Q17. Trial Balance is?
A. Final account
B. Interim statement
C. Ledger
D. None
✅ Ans: B
Q18. Balance sheet is prepared after?
A. Journal
B. Ledger
C. Trial Balance
D. None
✅ Ans: C
Q19. Trial Balance helps in?
A. Arithmetic accuracy
B. Profit
C. Loss
D. None
✅ Ans: A
Q20. Wrong totaling affects?
A. Trial Balance
B. Profit
C. None
D. Both
✅ Ans: A
📘 Chapter 7: Depreciation (20 MCQs)
Q1. Depreciation means?
A. Increase
B. Decrease
C. No change
D. None
✅ Ans: B
Q2. Causes of depreciation?
A. Wear & tear
B. Obsolescence
C. Passage of time
D. All
✅ Ans: D
Q3. Straight Line Method is?
A. Fixed method
B. Reducing method
C. Random
D. None
✅ Ans: A
Q4. Diminishing method is?
A. Fixed
B. Reducing balance
C. Random
D. None
✅ Ans: B
Q5. Depreciation is?
A. Expense
B. Income
C. Asset
D. None
✅ Ans: A
Q6. Depreciation reduces?
A. Liability
B. Asset value
C. Capital
D. None
✅ Ans: B
Q7. Depreciation is charged on?
A. Land
B. Building
C. Machinery
D. None
✅ Ans: C
Q8. Land is not depreciated because?
A. Unlimited life
B. No value
C. Expense
D. None
✅ Ans: A
Q9. Book value =?
A. Cost - Depreciation
B. Cost + Depreciation
C. Only cost
D. None
✅ Ans: A
Q10. Depreciation account shows?
A. Debit
B. Credit
C. Both
D. None
✅ Ans: A
Q11. Provision for depreciation is?
A. Asset
B. Liability
C. Contra asset
D. None
✅ Ans: C
Q12. Depreciation is charged every?
A. Month
B. Year
C. Both
D. None
✅ Ans: C
Q13. Objective of depreciation?
A. True profit
B. Asset valuation
C. Both
D. None
✅ Ans: C
Q14. Depreciation is based on?
A. Estimate
B. Exact value
C. None
D. Both
✅ Ans: A
Q15. Residual value means?
A. Scrap value
B. Cost
C. Profit
D. None
✅ Ans: A
Q16. Useful life means?
A. Life of asset
B. Market life
C. None
D. Both
✅ Ans: A
Q17. Depreciation is recorded in?
A. Ledger
B. Journal
C. Both
D. None
✅ Ans: C
Q18. Depreciation is a?
A. Cash expense
B. Non-cash expense
C. Asset
D. None
✅ Ans: B
Q19. Depreciation affects?
A. Profit
B. Asset
C. Both
D. None
✅ Ans: C
Q20. Which method gives equal depreciation?
A. SLM
B. Diminishing
C. Both
D. None
✅ Ans: A
📘 Chapter 8: Bills of Exchange (20 MCQs)
Q1. Bill of exchange is?
A. Order
B. Promise
C. Both
D. None
✅ Ans: A
Q2. Drawer is?
A. Writer
B. Payer
C. Bank
D. None
✅ Ans: A
Q3. Drawee is?
A. Writer
B. Acceptor
C. Bank
D. None
✅ Ans: B
Q4. Payee is?
A. Receiver
B. Writer
C. Bank
D. None
✅ Ans: A
Q5. Acceptance means?
A. Refusal
B. Agreement
C. Payment
D. None
✅ Ans: B
Q6. Bill is drawn for?
A. Cash
B. Credit
C. Both
D. None
✅ Ans: B
Q7. Time bill means?
A. Payable later
B. Payable immediately
C. None
D. Both
✅ Ans: A
Q8. Demand bill means?
A. Future
B. Immediate
C. None
D. Both
✅ Ans: B
Q9. Maturity means?
A. Issue
B. Due date
C. Acceptance
D. None
✅ Ans: B
Q10. Discounting means?
A. Selling bill to bank
B. Paying cash
C. None
D. Both
✅ Ans: A
Q11. Endorsement means?
A. Transfer
B. Payment
C. Issue
D. None
✅ Ans: A
Q12. Dishonour means?
A. Payment
B. Non-payment
C. Both
D. None
✅ Ans: B
Q13. Noting charges paid by?
A. Drawer
B. Drawee
C. Bank
D. None
✅ Ans: B
Q14. Renewal means?
A. New bill
B. Cancel bill
C. None
D. Both
✅ Ans: A
Q15. Retiring bill means?
A. Early payment
B. Late payment
C. None
D. Both
✅ Ans: A
Q16. Bill payable account is?
A. Asset
B. Liability
C. Income
D. None
✅ Ans: B
Q17. Bill receivable is?
A. Asset
B. Liability
C. Expense
D. None
✅ Ans: A
Q18. Bill can be?
A. Discounted
B. Endorsed
C. Both
D. None
✅ Ans: C
Q19. Promissory note is?
A. Promise
B. Order
C. None
D. Both
✅ Ans: A
Q20. Parties in bill?
A. 2
B. 3
C. 4
D. None
✅ Ans: B
📘 Chapter 9: Financial Statements (20 MCQs)
Q1. Financial statements include?
A. Trading A/c
B. P&L A/c
C. Balance Sheet
D. All
✅ Ans: D
Q2. Trading account shows?
A. Net profit
B. Gross profit
C. Expenses
D. None
✅ Ans: B
Q3. Profit & Loss account shows?
A. Gross profit
B. Net profit
C. Assets
D. None
✅ Ans: B
Q4. Balance sheet shows?
A. Profit
B. Financial position
C. Loss
D. None
✅ Ans: B
Q5. Closing stock appears in?
A. Trading A/c
B. Balance sheet
C. Both
D. None
✅ Ans: C
Q6. Opening stock is shown in?
A. Trading A/c
B. P&L A/c
C. Balance sheet
D. None
✅ Ans: A
Q7. Direct expenses are recorded in?
A. Trading A/c
B. P&L A/c
C. Balance sheet
D. None
✅ Ans: A
Q8. Indirect expenses are recorded in?
A. Trading
B. P&L
C. Balance sheet
D. None
✅ Ans: B
Q9. Purchase account is?
A. Income
B. Expense
C. Asset
D. None
✅ Ans: B
Q10. Sales account is?
A. Income
B. Expense
C. Asset
D. None
✅ Ans: A
Q11. Net profit increases?
A. Capital
B. Liability
C. Asset
D. None
✅ Ans: A
Q12. Net loss decreases?
A. Capital
B. Asset
C. Liability
D. None
✅ Ans: A
Q13. Balance sheet is prepared on?
A. Particular date
B. Period
C. Month
D. None
✅ Ans: A
Q14. Outstanding expenses are?
A. Asset
B. Liability
C. Income
D. None
✅ Ans: B
Q15. Prepaid expenses are?
A. Asset
B. Liability
C. Expense
D. None
✅ Ans: A
Q16. Accrued income is?
A. Asset
B. Liability
C. Expense
D. None
✅ Ans: A
Q17. Income received in advance is?
A. Asset
B. Liability
C. Income
D. None
✅ Ans: B
Q18. Bad debts are?
A. Income
B. Expense
C. Asset
D. None
✅ Ans: B
Q19. Provision for doubtful debts is?
A. Asset
B. Liability
C. Deduction from debtors
D. None
✅ Ans: C
Q20. Carriage inward is?
A. Direct expense
B. Indirect expense
C. Income
D. None
✅ Ans: A
📘 Chapter 10: Accounts from Incomplete Records (20 MCQs)
Q1. Single entry system is?
A. Complete
B. Incomplete
C. Double
D. None
✅ Ans: B
Q2. Single entry records?
A. All transactions
B. Partial transactions
C. No transactions
D. None
✅ Ans: B
Q3. It is used by?
A. Big firms
B. Small traders
C. Govt
D. None
✅ Ans: B
Q4. Statement of affairs is similar to?
A. Trading A/c
B. P&L A/c
C. Balance sheet
D. None
✅ Ans: C
Q5. Capital =?
A. Assets - Liabilities
B. Liabilities - Assets
C. Assets + Liabilities
D. None
✅ Ans: A
Q6. Opening capital is found by?
A. Statement of affairs
B. Trial balance
C. Ledger
D. None
✅ Ans: A
Q7. Closing capital is?
A. Final
B. Initial
C. Both
D. None
✅ Ans: A
Q8. Profit =?
A. Closing capital - Opening capital
B. Opening - Closing
C. None
D. Both
✅ Ans: A
Q9. Drawings reduce?
A. Capital
B. Asset
C. Income
D. None
✅ Ans: A
Q10. Additional capital increases?
A. Asset
B. Capital
C. Liability
D. None
✅ Ans: B
Q11. Incomplete records lack?
A. Full details
B. Accuracy
C. Both
D. None
✅ Ans: C
Q12. Credit sales may be found from?
A. Debtors
B. Creditors
C. Cash
D. None
✅ Ans: A
Q13. Credit purchases from?
A. Debtors
B. Creditors
C. Cash
D. None
✅ Ans: B
Q14. Cash book is maintained in?
A. Single entry
B. Double entry
C. Both
D. None
✅ Ans: C
Q15. Bills receivable is?
A. Asset
B. Liability
C. Expense
D. None
✅ Ans: A
Q16. Bills payable is?
A. Asset
B. Liability
C. Income
D. None
✅ Ans: B
Q17. Loss decreases?
A. Capital
B. Asset
C. Liability
D. None
✅ Ans: A
Q18. Profit increases?
A. Capital
B. Asset
C. Liability
D. None
✅ Ans: A
Q19. Incomplete records are?
A. Scientific
B. Unsystematic
C. Both
D. None
✅ Ans: B
Q20. Accuracy is?
A. High
B. Low
C. Medium
D. None
✅ Ans: B