Accounting mcqs

✅ The correct answer is B.
Transaction between business and owner are recorded following Business entity concept. The business entity concept states that the transactions associated with a business must be separately recorded from those of its owners or other businesses.

✅ The correct answer is A.
Current asset is TRUE about the treatment of insurance premium paid in advance. Current assets represent all the assets of a company that are expected to be conveniently sold, consumed, utilized or exhausted through the standard business operations, which can lead to their conversion to a cash value over the next one year period.

✅ The correct answer is B.
Drawing is a type of Withdrawal of capital. An owner’s drawing affects the capital account of a balance sheet, whereas a withdrawal has no such effect.

✅ The correct answer is D.
Those transactions for which there is no separate book, are recorded in the Journal Proper. Only those transactions, which cannot be conveniently recorded in any of the other books of original entry i.e., subsidiary books or which are not sufficiently numerous to necessitate a special book being devised for them, are recorded in this book.

✅ The correct answer is B.
Economic life of an enterprise Is split into periodic interval as per Periodicity concept. It is the concept that each accounting period has an economic activity associated with it, and that the activity can be measured, accounted for, and reported upon.

✅ The correct answer is B.
Suspense account given in the trial balance will be entered in the Balance sheet. If the Trial Balance does not agree, the difference is put to Suspense A/c. Suspense A/c on credit side of Trial Balance will be entered on the liabilities side of Balance Sheet. Suspense A/c on debit side of Trial Balance will be entered on the assets side of Balance Sheet.

✅ The correct answer is C.
The real accounts are accounts of Assets, Liabilities and Capital. The accounting formula essentially shows that what the firm owns (its assets) is purchased by either what it owes (its liabilities) or by what its owners invest (its shareholders equity or capital).

✅ The correct answer is B.
If a transaction is completely omitted from the books of accounts, No it wont effect the agreement of Trial Balance.

✅ The correct answer is A.
The going concern concept assumes that the entity continue running for forseeable future. The going concern principle is the assumption that an entity will remain in business for the foreseeable future.

✅ The correct answer is D.
Transactions that a business does not record in any specialized journal are recorded in General journal.