1. The process of recording is done
(a) Two times a year
(b) once a year
(c) Frequently during the accounting period
(d) At the end of a accounting period
2. The act of transferring the information from the General Journal to the General Ledger is called what?
(a) Posting
(b) Journalizing
(c) Transferring
(d) Pasting
3. What is a firm’s payment to a supplier for merchandise inventory recorded in?
(a) sales journal
(b) cash receipts journal
(c) purchases journal
(d) cash disbursements journal
4. Where are amounts owed by customers for credit purchases found?
(a) accounts receivable subsidiary ledger
(b) sales journal
(c) accounts receivable journal
(d) general ledger
5. Which of the following transactions is not recorded in the cash receipts journal?
(a) expensing prepaid rent
(b) receipt of customer payments
(c) borrowing money from a bank
(d) sale of equipment for cash
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6. Where would a debit posted to accounts payable in the general ledger come from?
(a) sales journal
(b) cash disbursements journal
(c) purchases journal
(d) cash receipts journal
7. A ____ lists each of the accounts in the general ledger with its balance as of a particular date. What is it?
(a) Trial Balance
(b) Balance Sheet
(c) General Journal
(d) Statement of retained earnings
8. Where are amounts owed by customers for credit purchases found?
(a) accounts receivable subsidiary ledger
(b) sales journal
(c) accounts receivable journal
(d) general ledger
9. Usually, what asset account in a company’s ledger is the most liquid?
(a) Ckeque
(b) Cash
(c) Book
(d) Account
10. A group of accounts with a common characteristic, such as all customer accounts is a…?
(a) General journal
(b) Subsidiary ledger
(c) Special journal
(d) General ledger
11. Which of the following is not an acceptable statement of the basic accounting equation?
(a) Assets = Liabilities – Owner’s Equity/Capital
(b) Assets = Liabilities + Owner’s Equity/Capital
(c) Assets – Liabilities = Owner’s Equity/Capital
(d) Assets – Owner’s Equity/Capital = Liabilities
12. General journal is a book of _______ entries
(a) First
(b) Original
(c) Secondary
(d) Generic
13. The process of recording transactions in different journals is called
(a) Posting
(b) Entry making
(c) Adjusting
(d) Journalizing
14. Every business transaction affects at least ________ accounts
(a) One
(b) Two
(c) Three
(d) Infinite
15. Discount allowed is a kind of deduction from
(a) Account payable
(b) Account receivable
(c) Cash account
(d) Discount account
16. The other name of journal is
(a) Ledger
(b) T account
(c) Day book
(d) Cash book
17. A journal entry in which two or more account is debited or credited is referred as
(a) Journal entry
(b) Multi entry
(c) Additional entry
(d) Compound entry
18. The term 2/10-n/30 implies that ______ % discount will be given if the payment is made within _____ days or full amount is receivable within 30 days
(a) 2,10
(b) 10,2
(c) 10,30
(d) 3,15
19. Goods returned by customer should be debited to which of the following accounts?
(a) Sales income account
(b) Sales account
(c) Return inward account
(d) Expenses account
20. Discount allowed is
(a) Expense of business
(b) Income of business
(c) Loss of business
(d) Abnormal loss of business
21. _________ is the evidence that a transaction took place
(a) Source documents
(b) Ledger
(c) Bonds
(d) Journals
22. Which of the following will be debited if a business purchases goods on credit?
(a) Cash
(b) Debtor
(c) Creditor
(d) Purchases
23. 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
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24. Journals are also referred as
(a) Book of entries
(b) Book of original entries
(c) T account
(d) Books of economic event
25. The standard format of journal does not include which of the following?
(a) Assets column
(b) Date column
(c) Description column
(d) Amount column
26. In which of the following orders data is entered in journal?
(a) Alphabetical order
(b) Numeric order
(c) Bullets order
(d) Chronological order
27. Cash discount is allowed on _______ repayment of debt
(a) Lump sum
(b) Prompt
(c) Actual
(d) None of them
28. Cash book is prepared by
(a) Bank
(b) Accountant of business
(c) Manager of a company
(d) Bank’s cashier
29. The most common imprest system is the ________ system
(a) petty cash
(b) Cash book
(c) Cash receipt
(d) Discount
30. Discount received is recorded on which of the following side of a cash book?
(a) Receipts
(b) Payments
(c) Incomes
(d) Expenditures
31. Drawings by owner of business are generally recorded on which of the following side of a cash book?
(a) Receipts
(b) Payments
(c) Incomes
(d) Expenditures
32. Introduction capital by owner of business is recorded on which side of a cash book?
(a) Receipts
(b) Payments
(c) Incomes
(d) Expenditures
33. Cash book with cash and discount column is mostly referred as
(a) Simple cash book
(b) Two column cash book
(c) Three column cash book
(d) Petty cash book
34. A cash book that is used to record the small payments of cash is generally referred as
(a) Simple cash book
(b) Two column cash book
(c) Three column cash book
(d) Petty cash book
35. A simple or one column cash book usually has which of the following main columns?
(a) Bank
(b) Payments
(c) Discount
(d) Cash
36. 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
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37. Discount for quick repayment of debt is normally referred as
(a) Trade discount
(b) Prompt payment discount
(c) Cash discount
(d) Bulk discount
38. The first step in accounting process is
(a) Recording the transaction
(b) Identifying the transaction
(c) Posting the transaction
(d) Preparing the source documents
39. 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
40. The closing balance of petty cash book is considered as
(a) Liability
(b) Asset
(c) Expenses
(d) Income
41. Payment of rent expenses is recorded on which side of cash book?
(a) Receipts
(b) Payments
(c) Income
(d) Expense
42. An entry which is made on both sides of a cash book is called
(a) Cash entry
(b) Contra entry
(c) Payment entry
(d) Compound entry
43. A cash book with cash, bank and discount column is commonly referred as
(a) Cash book
(b) Two columns cash book
(c) Three columns cash book
(d) Petty cash book
44. Cash book records
(a) Cash payments
(b) Cash receipts
(c) Cash payments and cash receipts
(d) Neither cash payments nor cash receipts
45. Purchase of office equipment for cash will be recorded on which of the following sides of a cash book?
(a) Receipts
(b) Payments
(c) Incomes
(d) Expenditures
46. Postdated checks are considered as
(a) Cash
(b) Bank balance
(c) Accounts receivable
(d) Cash reserve
47. Postage stamps on hand are considered as
(a) Bank
(b) Prepaid expenses
(c) Accounts receivable
(d) Creditor
48. Petty cash fund is supposed to be replenished
(a) Every day
(b) Every half year
(c) Every year
(d) At the end of every accounting period
49. Which of the following is generally not the party to a check?
(a) Payee
(b) Payer
(c) Bank
(d) Seller
50. A credit balance in cash book indicates
(a) Bank balance
(b) Cash at bank
(c) Bank underdraft
(d) Bank overdraft
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