Question # 1

One way of avoiding errors in the permanent accounting records is to use a form which is called

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Bank statement

Trail balance

Balance sheet

Work sheet

The accrued income or outstanding income will appear in the balance sheet as

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An expense

A liability

An asset

Both a & b

Which book is used to record all cash receipts and cash payments?

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Sale book

Purchase book

Cash book

Petty cash book

Net sales are equal to sales minus

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Returns inwards

Returns outwards

Cost of goods sold

carriage on sales

An expenditure, which is temporarily increase the profit making capacity of the business is called

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Deferred expenditure

Capital expenditure

Revenue expenditure

Non-recurring expenditure

The accounting system in which accounting entries are made on the basis of amount having become due for payment or receipt, is called

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Cash system

Accrual or mercantile system

Outstanding system

None of these

All the transactions related to credit sales are recorded in

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Sales returns book

Sales book

Cash book

Credit note book

The margin that is available to cover the other expenses for a period and to yield net income is known as

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Net profit

Gross profit

Net sales

Cost of goods sold

The bad debts which are showed in the trial balance are called

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new bad debts

old bad debts

further bad debts

additional bad debts

All cash purchases and cash sales are recorded in:

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Sales book

Purchases book

Both a & b

Cash book

The concept of conservation will have the effect of:

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Understatement of assets

Under statement of liabilities

Overstatement of assets

None of the above

Wages paid of installing a machine should be debited to

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Wages a/c

cash a/c

Machinery a/c

None of these

Accounting principles can be classified in

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three types

two types

five types

six types

The balance of petty cash book is a/an

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Asset

Liability

Expense

Income

The favorable balance of cash book bank column is

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Credit balance

Debit balance

Both debit and credit balance

None of these

The const concept applied only to the assets and not to:

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Expenses

Liabilities

Incomes

None of these

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Principles of accounting Icom Part 1 English Medium Online Test MCQs With Answers

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