Accountancy Class 11 Chapter 2 Basic Accounting Terms MCQ
Q.1. Capital is
(a) internal liability
(b) external liability.
(c) internal as well as external liability.
(d) None of these.
Q.2. Goods taken by the proprietor for personal use is
(a) Sale.
(b) Drawings.
(c) Purchase.
(d) None of these
Q.3. Amount received or receivable against sale of goods is
(a) revenue receipt.
(b) capital receipt.
(c) sometimes revenue receipt and sometimes capital receipt.
(d) None of these.
Q.4. Amount paid or payable against purchase of goods is revenue expenditure.
(a) revenue expenditure
(b) capital expenditure
(c) Both (a) and (b).
(d) None of these.
Q.5. Goodwill is a/an
(a) Tangible Asset
(b) Intangible Asset
(c) Current Asset.
(d) Fictitious Asset.
Q.6. Expenditure of revenue nature that gives benefit for more than one accounting period is categorised as
(a) Capital Expenditure.
(b) Revenue Expenditure.
(c) Deferred Revenue Expenditure.
(d) None of these.
Q.7. A person who owes money to a firm against goods sold is called a
(a) creditor.
(b) debtor.
(c) Both (a) and (b)
(d) None of these.
Q.8. A person to whom money is owed by a firm for purchase of goods is called a
(a) creditor.
(b) debtor
(c) Both (a) and (b)
(d) None of these.
Q.9. Purchase refers to the purchase of
(a) goods for resale.
(b) stationery for office use.
(c) assets for the factory.
(d) None of the above.
Q.10. A liability arises because of
(a) cash transactions.
(b) credit transactions
(c) cash as well as credit transactions.
(d) None of these.
Q.11. The amount invested by the proprietor in a business is called
(a) capital.
(b) cash.
(c) revenues.
(d) loan.
Q.12. Stock is valued at
(a) Cost or Not Realisable Value (Market Value), whichever is lower.
(b) Cost or Not Realisable Value (Market Value), whichever is higher
(c) Cost.
(d) Net Realisable Value (Market Value). )
Q.13. Bank overdraft is
(a) short-term liability.
(b) long-term liability
(c) contingent liability
(d) None of these.
Q.14. Which of the following is not a business transaction?
(a) Bought furniture of Rs 25,000 for business.
(b) Paid for salaries of employees, Rs 20,000.
(c) Cash withdrawn from personal bank account, Rs 10,000 for domestic use.
(d) All of the above.
Q.15. Which of the following is not a fixed asset?
(a) Building
(b) Plant and Machinery
(c) Balance with bank
(d) Goodwill
Q.16. Which of the following is not a long-term liability?
(a) Creditors
(b) Term-loan
(c) Debentures
(d) Capital
Q.17. Which of the following are goods
(a) Machines manufactured for sale.
(b) Furniture purchased for sale.
(c) Books and stationery purchased by a book seller.
(d) All of the above.
Q.18. Which of the following is an asset?
(a) Machinery
(b) Purchases
(c) Sales Return
(d) Interest Received
Q.19. Which of the following is a liability?
(a) Furniture
(b) Rent Payable
(c) Interest Received
(d) Stock
Q.20 Which of the following is revenue?
(a) Purchases
(6) Purchases Return
(c) Sales
(d) Salary Payable
Q.21 Which of the following is not an expense?
(a) Furniture
(b) Salary
(c) Rent
(d) Electricity Expenses
Q.22. Which of the following is a business transaction
(a) Goods purchased on credit.
(b) An employee being dismissed.
(c) Proprietor purchasing a car for own use.
(d) Sale of personal asset by the proprietor.
Q.23. The nature of capital is
(a) an asset.
(b) a liability.
(c) an income.
(d) an expense.
Q.24. Sale is recognised as revenue
(a) when the contract for sale is entered into.
(b) at the point of sale or performance of service
(c) after the expiry of credit period allowed to debtors.
(d) after the money collected from the customers.
Q.25. The nature of accrued income is
(a) revenue
(b) liability.
(c) expenses.
(d) asset.
Q.26. Trade Discount allowed
(a) is shown separately in the books of account.
(b) is not shown separately in the books of account.
(c) can be shown either separately or deducted from purchase cost.
(d) None of the above.
Q.27. Which of the following transaction is not of financial character?
(a) Purchase of asset on credit
(b) Purchase of asset for cash
(c) Withdrawing of money by proprietor from business
(d) Strike by employees.
Q.28. Purchase refers to the buying of
(a) Stationery for office use.
(b) Assets for the factory.
(c) Goods for resale.
(d) Investment.
Q.29. Revenue from Operations refers to
(a) Revenue earned from Operating Activities.
(b) Revenue earned from activities that are not Operating Activities.
(c) Both (a) and (b).
(d) None of the above.
Q.30. Out of the following assets, which one is not an intangible asset?
(a) Machinery
(b) Patents Mark
(c) Goodwill
(d) Trade
1. MCQ Questions for Accountancy Class 11 Chapter 1 Introduction to Accounting
1. True or False:
(i) Goodwill is a tangible Asset.
(ii) A person who owes money to the firm against goods sold is a debtor.
(iii) A person to whom money is owed by a firm for purchase of goods is a creditor.
(iv) Stock is valued at Cost or Net Realisable Value (Market Value), whichever is higher.
(v) Machinery used in production is not a fixed asset.
(vi) Rent Payable is a liability.
(vii) Purchases is a revenue.
(viii) Trade discount is recorded in the books
(ix) Goods taken by the owner for personal use is debited to capital account.
(x) ‘Goods’ means physical item of trade.
(xi) Debtors, Bills Receivables, Bank Balances are examples of fictitious assets.
(xii) A person who is not in a position to pay his debts is known as insolvent.
[Ans.: (i) False; (ii) True; (iii) True; (iv) False; (v) False; (vi) True; (vii) False; (viii) False; (ix) False; (x) True; (xi) False; (xii) True.]
1. MCQ Questions for Accountancy Class 11 Chapter 1 Introduction to Accounting
2. Fill in the blanks
(i) A person to whom a firm owes money for purchase of goods is a ___________
(ii) Amount invested by the owner in business is termed as _________
(iii) Amount of debts ____________ from the debtors are termed as bad debts.
(iv) A person who owes money to the firm for sale of goods is a ____________________
(v) The nature of capital is a _______________
(vi) The nature of accrued income is ______________
(vii) Bad Debts recovered is a ___________ receipt.
(viii) Purchases means purchase of goods for ____________________
(ix) Bank-Overdraft is a _______________ liability.
(x) Amount at which an asset appears in the books of account is _______________________
(xi) Fall in the value of an asset due to its use is termed as ________________________
(xii) A liability arises because of ___________________ transactions.
[Ans.: (i) creditor; (ii) capital; (iii) irrecoverable; (iv) debtor; (v) liability; (vi) asset (vii) revenue; (viii) resale; (ix) current; (x) book value; (xi) depreciation; (xii) credit]
