Chapter 6 ACCOUNTANCY : Book Keeping Accounting and Principles — Online MCQ Test
COMMERCE · CLASS 11 INTER I YEAR · Andhra State Board
Practice Chapter 6 ACCOUNTANCY : Book Keeping Accounting and Principles with a free chapter-wise online MCQ test.
This chapter covers: This chapter details fundamentals of book keeping GAAP accounting concepts entity going concern dual aspect double entry system rules and account classifications..
AI-generated questions from basic to board-exam level, with instant results and explanations.
Chapter 6 ACCOUNTANCY : Book Keeping Accounting and Principles — Important Questions & Answers
What is the main purpose of bookkeeping?
- A. To prepare final accounts only
- B. To record business transactions systematically
- C. To calculate income tax
- D. To manage advertisement expenses
Answer: B. To record business transactions systematically
Bookkeeping is the process of recording financial transactions in a systematic manner. It forms the basis for accounting.
Bookkeeping is the process of recording financial transactions in a systematic manner. It forms the basis for accounting.
Which of the following best defines the entity concept?
- A. Owner and business are the same entity
- B. Business is separate from the owner
- C. Only large firms are treated as entities
- D. Assets belong only to creditors
Answer: B. Business is separate from the owner
The entity concept states that the business is treated as separate and distinct from its owner. This helps in recording business transactions properly.
The entity concept states that the business is treated as separate and distinct from its owner. This helps in recording business transactions properly.
Under the going concern concept, it is assumed that the business will:
- A. Close down soon
- B. Continue for an indefinite period
- C. Sell all assets immediately
- D. Never make losses
Answer: B. Continue for an indefinite period
The going concern concept assumes that a business will continue operating in the foreseeable future. Therefore, assets are recorded at their original cost less depreciation.
The going concern concept assumes that a business will continue operating in the foreseeable future. Therefore, assets are recorded at their original cost less depreciation.
Goods worth ₹10,000 sold for cash will result in:
- A. Increase in cash and decrease in capital
- B. Increase in cash and increase in sales
- C. Decrease in cash and increase in purchases
- D. Increase in debtors and decrease in sales
Answer: B. Increase in cash and increase in sales
A cash sale increases cash and also increases sales, which is income for the business. Both effects are recorded under double entry.
A cash sale increases cash and also increases sales, which is income for the business. Both effects are recorded under double entry.
A business purchased machinery on credit. Which journal effect is correct under double entry?
- A. Debit Cash Account and credit Machinery Account
- B. Debit Machinery Account and credit Creditor's Account
- C. Debit Creditor's Account and credit Machinery Account
- D. Debit Purchase Account and credit Cash Account
Answer: B. Debit Machinery Account and credit Creditor's Account
Machinery is an asset, so it is debited. Since the purchase is on credit, the creditor is credited because a liability is created.
Machinery is an asset, so it is debited. Since the purchase is on credit, the creditor is credited because a liability is created.