Accounting mcqs

✅ The correct answer is D.
Cash Book serves the purpose of ledger too, in addition to the recording of accounting transaction. A cash book is a financial journal that contains all cash receipts and payments, including bank deposits and withdrawals. Entries in the cash book are then posted into the general ledger.

✅ The correct answer is D.
Debit note is the basis for recording a transaction in Purchase return journal. The source document for recording entries in the purchases return journal is generally a debit note.

✅ The correct answer is C.
The allocation of owner’s private expenses to his/her business violates Separate 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 B.
Cash account will be credited when the goods are purchased on cash.

✅ The correct answer is C.
Cash book is a type of cash receipt journal + cash payment journal. A cash book is a financial journal that contains all cash receipts and payments, including bank deposits and withdrawals.

✅ The correct answer is C.
An ‘account’ records the Increase or decrease in the balance of an item. An account is an individual accounting record of increase and decrease in a specific asset, liability or stockholders equity item.

✅ The correct answer is A.
A Trial Balance is a statement that shows the total of debit and credit balances of accounts. The total of debit amounts shall be equal to the credit amounts for the trial balance to tally. Hence, it verifies the arithmetical accuracy of the postings in the ledger accounts.

✅ The correct answer is A.
Cost of a fixed asset – Accumulated depreciation expenses of the fixed asset = Book value of a fixed asset. Except for the cost of land, the cost of a fixed asset is spread over its estimated useful life to the business; the amount allocated to each period is called depreciation expense.

✅ The correct answer is C.
Shareholders are the owners of a company. A shareholder, also referred to as a stockholder, is any person, company, or institution that owns at least one share of a company’s stock.

✅ The correct answer is B.
An increase in the value of fixed asset is referred to as Appreciation. Appreciation, in general terms, is an increase in the value of an asset over time. The increase can occur for a number of reasons, including increased demand or weakening supply, or as a result of changes in inflation or interest rates.