Chapter 3 ACCOUNTANCY : Double Entry Book Keeping System — Online MCQ Test
ACCOUNTANCY · CLASS 11 INTER I YEAR · Andhra State Board
Practice Chapter 3 ACCOUNTANCY : Double Entry Book Keeping System with a free chapter-wise online MCQ test.
This chapter covers: This chapter covers core double entry principles classification of accounts personal real nominal account rules and accounting equation concepts..
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Chapter 3 ACCOUNTANCY : Double Entry Book Keeping System — Important Questions & Answers
The fundamental principle of double-entry bookkeeping states that for every debit, there must be a corresponding:
- A. Credit
- B. Asset
- C. Liability
- D. Capital
Answer: A. Credit
Double entry system is based on the duality principle, where every transaction affects at least two accounts with equal debit and credit amounts.
Double entry system is based on the duality principle, where every transaction affects at least two accounts with equal debit and credit amounts.
Which of the following is classified as a 'Real Account'?
- A. Salary Account
- B. Cash Account
- C. Ram's Account
- D. Outstanding Expenses Account
Answer: B. Cash Account
Real accounts relate to assets and properties owned by the business; cash is a tangible asset.
Real accounts relate to assets and properties owned by the business; cash is a tangible asset.
If the business purchases furniture for cash, which accounts are affected?
- A. Furniture (Real) and Cash (Real)
- B. Furniture (Nominal) and Cash (Real)
- C. Furniture (Personal) and Cash (Real)
- D. Furniture (Real) and Capital (Personal)
Answer: A. Furniture (Real) and Cash (Real)
Furniture is a real asset coming in, and cash is a real asset going out.
Furniture is a real asset coming in, and cash is a real asset going out.
Which transaction increases both Assets and Liabilities?
- A. Purchased goods for cash
- B. Purchased machinery on credit
- C. Paid off a creditor
- D. Withdrew cash for personal use
Answer: B. Purchased machinery on credit
Purchasing machinery on credit increases the asset (machinery) and simultaneously increases the liability (creditor).
Purchasing machinery on credit increases the asset (machinery) and simultaneously increases the liability (creditor).
Which statement regarding the Double Entry system is PRO?
- A. It ensures the trial balance always matches if the books are closed
- B. It is based on the logic that debit and credit are just sides of a balance sheet
- C. It allows for the systematic recording of financial transactions by maintaining the equality of the equation
- D. It records only cash transactions to maintain accuracy
Answer: C. It allows for the systematic recording of financial transactions by maintaining the equality of the equation
The double entry system's primary strength is maintaining the integrity of the accounting equation by recording the dual effect of every transaction.
The double entry system's primary strength is maintaining the integrity of the accounting equation by recording the dual effect of every transaction.