Question # 1

Wrong allocation of capital and revenue items of expenses represents

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error of casting

error of principle

compensation error

error of commission

The capital profit should be transferred to:

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Profit and loss account

Trading account

Balance Sheet

Both Trading and profit and loss account and balance sheet

How many parties are involved in case of Discounting of a bill ?

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Two

Three

Four

None of these

The effect of drawing on accounting equation is

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decrease in assets and decrease in liabilities

increase in both assets & liabilities

decrease in assets and increase in capital

none of these

An expenditure, which is completely exhausted with in the current accounting period is known as

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Deferred expenditure

Revenue expenditure

Future expenditure

Non-recurring expenditure

Loss of good by fire should be credited to:

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Purchase account

Sales account

Loss by goods by fire account

Capital account

Income statement is prepared to ascertain the net result of the business concern under

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British accounting system

American accounting system

Cash system of accounting

None of these

Preliminary expenses paid in the formation of a company is a

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Capital expenditure

Deferred expenditure

Revenue expenditure

Capital loss

The amount of assets, liabilities, capital and drawings are extended form adjusted trail balance to the

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Balance sheet columns

Income statement columns

Cash columns

Bank columns

A sale of Rs. 1000 to Farid, was credited to his account, it will affect

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Sales account

Farid account

Cash account

Both a & b

Our cheque to Babar & Bros, returned dishonoured should be credited to

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Cheque Account

Cash Account

Bank Account

Babar & Bros A/c

Income and expenditur eaccount is prepared on.

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Cash basis

Accrual basis

Cahs of accural basis

None of these

The main sources of income of for on -trading concern is.

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Subscriptions

Donations

Sales

Dividends on investment

The closing balance of trade debtors can be located from.

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Total debtors account

Balance sheet

Bils receivable account

Cash book

Abnormal loss arises due to.

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Natural causes

Evaporation drying breaking in bulk

Pilferage , theft fire etc.

Some unavoidable causes

Subscription otstanding in the beginning are shown in the

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Trading account

Income and expenditure account

Balance sheet

Profit and loss account

Receipt and payment account includes.

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Revenue items

Capital items

Both capital and Revenue items

None of the above

The owner wquity in a company is commonly called.

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Shareholder equity

promotors equity

Directors equity

None of these

The toal amount of capital, in case of company is divided into small units, these units are called.

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Bonds

Cheque

Share

Reserve

Income and expenditure account shows

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Cash in hand

Surplus or deficit

Cash at bank

Capital account

All transactions relating to non-profit seeking concerns are recorded in the books of account strictly according to

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Single entry system

Double entry system

Treble entry system

"a" and "b"

The losses arise in consignment transactions, such as loss of goods in transit, theft, goods damaged or destroyed by fire etc are.

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Normal losses

Additional loss

Abnormal losses

Both abnormal and normal loss

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