1) Which of the following may not be part of the Bank reconciliation process.
a) Interest on overdraft
b) Dishonour of cheque
c) Cash drawn from bank
d) Cheque deposited but not collected
Ans: c
2) Reconciliation of overcasting on receipts side of cash book
a) Increases the balance in the cash book.
b) Increases the balance in the passbook.
c) Decreases the balance in the cash book.
d) Decreases the balance in the passbook.
Ans: c
3) Which of the following is true
a) Bank Reconciliation Statement(BRS) is an account.
b) BRS is prepared by the bank.
c) BRS shows causes of disagreement between cash book & passbook.
d) BRS shows only excess of cash book over passbook.
Ans: c
4) If a trader enjoys an overdraft facility, then
a) His passbook will show debit balance.
b) His cash book will show debit balance .
c) excess of deposits over withdrawals
d) None of the above
Ans: a
5) Direct deposit by a customer in the bank
a) Shows a higher passbook balance than cash book.
b) Shows a lesser passbook balance than cash book.
c) Shows no difference.
d) None of the above.
Ans: a
6) Goods worth Rs.2000 sold to Vijay was entered in purchase account;
The rectification is
a) Credit purchases and credit sales to the extent of Rs.2000 each & debit Vijay by Rs.2000
b) Debit purchases and debit sales to the extent of Rs.2000 each & credit Vijay.
c) Debit sales to the extent of Rs.4000.
d) Credit purchases to the extent of Rs.4000.
Ans: a
7) Machinery worth (WDV) 1000/- sold for 1200/- is entered in sales register. The rectification is
a) Credit sales 1200/-, debit machinery 1000/- and debit P&L a/c 200/-.
b) Debit sales 1200/- , credit machinery 1000/- and credit P&L a/c 200/-.
c) Credit machinery 1200/-, debit sales 1000/- and debit P&L a/c 200/-.
d) Debit machinery 1200/-, credit sales 1000/- and credit P&L a/c 200/-.
Ans: b
8. Sales return of amount Rs.1000 from Vijay was wrongly entered in purchase book.
The rectification is
a) Debit sales to the extent of Rs.2000.
b) Credit purchases to the extent of Rs.2000
c) Credit Vijay Rs.2000, debit sales and purchases to the extent Rs.1000, each.
d) Debit sales return by Rs.1000 and credit purchases by Rs.1000
Ans: d
9) Which of the following will not affect Trial Balance
a) Goods sold on credit not recorded in books.
b) Overstating of sales register.
c) Rent account credited instead of debit.
d) Salary debited to the extent ½ the amount.
Ans: a
10) Suspense a/c is not used in which of the following cases.
a) before trial balance.
b) after trial balance.
c) before final accounts.
d) none of the above.
Ans: a
11) Which of the following is true
a) Trial balance ensures arithmetical accuracy.
b) Trial balance errors are not located then the difference is sent to suspense a/c.
c) Trial balance is base for final accounts.
d) All of the above.
Ans: d
12) Which of the following are true
a) Nominal accounts always have credit balances.
b) Real accounts always have debit balances.
c) Debit balance in ledger account is credit balance in trial balance.
d) P&L a/c appears in trial balance.
Ans: b
13) Freight expenses for moving new machinery to factory is
a) Revenue expenses
b) Deferred revenue expenditure
c) Capital expenditure
d) None of the above
Ans: c
14) Which of the following is false
a) Replacement of defective part of machinery is revenue expenditure
b) Daily wages paid for erection /installing of machinery is capital expenditure
c) Underwriting commission for issue of shares is revenue expenditure
d) Excess of sale price of Machinery over its W D Value but less than cost price is treated as revenue receipt
Ans: c
15) Which of the following is not a deferred revenue expenditure
a) Preliminary expenses for setting up a company.
b) Amount raised through Rights issue.
c) Huge sales promotion expenditure in launch of new product
d) Cost of preparing project report
Ans: b
