Question # 1

Preliminary expenses paid in the formation of a company is a

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Capital expenditure

Deferred expenditure

Revenue expenditure

Capital loss

If any income omitted to be recorded it will

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Overstate the profit

Understate the profit

Both a & b

having no effect on profit

All the time of endorsement of a bill the drawer credits:

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The drawee account

The endorser's personal account

Bill receivable account

Endorser's account

If sales return for Rs. 3,000 were incorrectly included in sales book, gross profit will be

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overstated by Rs. 3,000

understated by Rs. 6,000

understated by Rs. 3,000

overstated by Rs. 6,000

The cash book is a book of

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Compound entry

Original entry

Final entry

Simple entry

Capital contributed by the partners is a:

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Revenue receipt

Capital receipt

Current receipt

Deferred receipt

Sales are equal to

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Cost of goods sold + Profit

Gross profit - cost of goods sold

Cost of goods sold - gross profit

None of these

The accounting system in which accounting entries are made on the basis of amount having become due for payment or receipt, is called

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Cash system

Accrual or mercantile system

Outstanding system

None of these

The balance of the 'Caha Column' in cash book is always:

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Debit balance

Credit balance

Both debit and credit balance

None of the above

It is prepared to determine the net profit or net loss

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Trading account

Profit or loss account

Cash book

Balance sheet

A credit sale was wrongly passed through purchases book, the rectification of the entry will:

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Increase the net profit by, double amount

Decrease the net profit

Decrease the net profit by double amount

Have no effect on the net profit

A revenue expenditure, the benefit of which is not confined to one accounting year is called

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Non-current expenditure

Revenue expenditure

Future expenditure

Deferred expenditure

When money is paid to a creditor or supplier a receipt is obtained from him which is called

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Cash voucher

Cash payment

Receipt voucher

Payment voucher

Bank reconciliation statement is prepared by

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Banker

Customer's accountant

Auditors

Manager

A trial balance can be constructed by

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Three Methods

Two Methods

Four Methods

Five Methods

The favourable balance of bank statement is

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Credit Balance

Debit Balance

Zero Balance

Both b and c

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