Chapter 7 ACCOUNTANCY : Single Entry Accounting System — Online MCQ Test
ACCOUNTANCY · CLASS 12 INTER II YEAR · Andhra State Board
Practice Chapter 7 ACCOUNTANCY : Single Entry Accounting System with a free chapter-wise online MCQ test.
This chapter covers: This chapter covers features and limitations of incomplete records determining profit or loss using statement of affairs method and conversion to double entry principles..
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Chapter 7 ACCOUNTANCY : Single Entry Accounting System — Important Questions & Answers
Incomplete records are generally maintained by:
- A. Large companies
- B. Small sole traders
- C. Government departments
- D. Public limited companies
Answer: B. Small sole traders
Small businesses with limited resources often maintain incomplete records to save on accounting costs.
Small businesses with limited resources often maintain incomplete records to save on accounting costs.
Which of the following is an account that is NOT maintained under the single entry system?
- A. Cash Book
- B. Personal Accounts
- C. Real Accounts
- D. Both Real and Nominal accounts
Answer: D. Both Real and Nominal accounts
Single entry system typically records only cash and personal accounts, omitting most real and nominal accounts.
Single entry system typically records only cash and personal accounts, omitting most real and nominal accounts.
If Closing Capital is Rs. 50,000, Drawings are Rs. 10,000, and Opening Capital is Rs. 40,000, what is the profit/loss?
- A. Rs. 20,000 Profit
- B. Rs. 10,000 Profit
- C. Rs. 20,000 Loss
- D. Rs. 0 Profit
Answer: A. Rs. 20,000 Profit
Profit = (Closing Capital + Drawings) - Opening Capital. (50,000 + 10,000) - 40,000 = 20,000.
Profit = (Closing Capital + Drawings) - Opening Capital. (50,000 + 10,000) - 40,000 = 20,000.
How is 'Interest on Capital' treated when calculating profit under the Statement of Affairs method?
- A. It is ignored
- B. Added to closing capital
- C. Deducted from closing capital
- D. Added to opening capital
Answer: C. Deducted from closing capital
Interest on capital is an expense for the business and must be deducted from the closing capital to arrive at true profit.
Interest on capital is an expense for the business and must be deducted from the closing capital to arrive at true profit.
If the 'Capital at the end' is Rs. 1,00,000, 'Drawings' are Rs. 20,000, 'Capital introduced' is Rs. 30,000, and 'Capital at the beginning' is Rs. 90,000, what is the profit?
- A. Rs. 0
- B. Rs. 10,000
- C. Rs. 20,000
- D. Rs. -10,000
Answer: A. Rs. 0
Profit = (Closing Capital + Drawings) - (Opening Capital + Capital Introduced) => (100k + 20k) - (90k + 30k) = 0.
Profit = (Closing Capital + Drawings) - (Opening Capital + Capital Introduced) => (100k + 20k) - (90k + 30k) = 0.