Question 1.
Which of the following equation’s correct?
(a) Assets = Liabilities – Capital
(b) Assets = Capital – Liabilities
(c) Assets = Liabilities + Capital
(d) Assets = External Equities

Answer

Answer: (c) Assets = Liabilities + Capital

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Question 2.
Which of the following is correct?
(a) Profit/Loss = Closing Capital + Additional Capital – Drawings – Opening Capital
(b) Profit/Loss = Closing Capital-Drawings-Additional Capital – Opening Capital
(c) Profit/Loss = Opening Capital + Drawings made – Additional Capital – Closing Capital
(d) Profit/Lose = Closing Capital + Drawings made – Additional Capital – Opening Capital

Answer

Answer: (d) Profit/Lose = Closing Capital + Drawings made – Additional Capital – Opening Capital

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Question 3.
The liabilities of a firm are Rs. 60,000 and the capital of the proprietor is Rs. 40,000. The total assets are:
(a) 60,000
(b) 1,00,000
(c) 20,000
(d) 40,000

Answer

Answer: (b) 1,00,000

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Question 4.
If a film borrows a sum of money, there will be
(a) Increase in capital
(b) Decrease in capital
(c) No effect on capital
(d) None of the above

Answer

Answer: (a) Increase in capital

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Question 5.
Debit Means
(a) an increase in asset
(b) a decrease in asset
(c) an increase in liability
(d) an increase in capital

Answer

Answer: (a) an increase in asset

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Question 6.
Journal is a book of in accounting.
(a) All non-cash transactions
(b) Secondary entry
(c) Original entry
(d) All cash transaction.

Answer

Answer: (c) Original entry

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Question 7.
The following account has a debit balance
(a) Creditor’s A/c
(b) Capital A/c
(c) Building A/c
(d) Loan A/c

Answer

Answer: (c) Building A/c

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Question 8.
Ledger is a book of …………. in accounting.
(a) All non-cash transactions
(b) Secondary entry
(c) Original entry
(d) All cash transactions

Answer

Answer: (b) Secondary entry

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Question 9.
The process of recording a business transaction in the journal is called
(a) Costing
(b) Balancing
(c) Posting
(d) Journalising

Answer

Answer: (d) Journalising

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Question 10.
Which of the following is a cash transaction?
(a) Sold goods
(b) Sold goods to Ravinder
(c) Sold goods to Ravinder on credit
(d) Sold goods to Ravinder on account.

Answer

Answer: (a) Sold goods

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Fill in the blanks

Question 1.
The accounting voucher are based on …………….

Answer

Answer: Supporting

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Question 2.
Both debit and credit aspects of a transaction are shown by …………… vouchers.

Answer

Answer: Transfer

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Question 3.
Accounting equation satisfies the …………….. concept of accounting.

Answer

Answer: Dual

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Question 4.
Liabilities = ……………….. – Capital

Answer

Answer: Assets

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Question 5.
Accounting equation serves as a basis for preparing …………….

Answer

Answer: Balance Sheet

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Question 6.
Journalising is the process of entering transactions in ………………

Answer

Answer: Journal

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Question 7.
The explanation of a Journal entry is known as ……………….

Answer

Answer: Narrations

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Question 8.
Transactions, when recorded in journal, are known as ………………

Answer

Answer: Entries

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Question 9.
Ledger account gives the folio of ………………….

Answer

Answer: Journal

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Question 10.
The balance of capital account is usually ………………… balance.

Answer

Answer: Credit

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