MCQs Accountancy Class 11 Chapter 2: Basic Accounting Terms
MCQS of Chapter 1 Basic Accounting Terms Class 11 with answers for CBSE, ISC and State Boards.
In a business ‘Purchases’ refers to the:
(a) Purchase of an article to be used in office
(b) Purchase of goods for resale
(c) Purchase of an assets to be used in factory
(d) All of the above
Ans – (b)
Amount received on receivable against sale of goods is:
(a) Revenue Receipt
(b) Capital Receipt
(c) Sometimes revenue receipt and sometimes capital receipts
(d) Capital Reserve
Ans – (a)
Capital is
(a) internal liability
(b) External liability
(c) internal as well as external liability
(d) None of these
Ans – (a)
The term fixed assets include:
(a) Closing stock
(b) Bills Receivable
(c) Debtors
(d) Furniture
Ans – (d)
The term current assets include:
(a) Debtors
(b) Motor Vehicle
(c) Machinery
(d) Building
Ans – (a)
Goods taken by the proprietor for personal use is:
(a) Sale
(b) Drawings
(c) Purchase
(d) None of these
Ans – (b)
Current assets do not include:
(a) Stock
(b) Short term investment
(c) Prepaid expenses
(d) Unearned income
Ans – (d)
Tangible Asset is:
(a) Goodwill
(b) Stock
(c) Patents
(d) Prepaid Expenses
Ans – (b)
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 the above
Ans – (a)
Intangible Asset is:
(a) Cash
(b) Stock
(c) Goodwill
(d) Land
Ans – (c)
Amount paid or payable against purchase of goods is
(a) revenue expenditure
(b) capital expenditure
(c) Both (a) and (b)
(d) None of these
Ans – (a)
Wasting Asset is:
(a) Machinery
(b) Oil Wells
(c) Computer
(d) All of the above
Ans – (b)
Fixed Liabilities include:
(a) Bank Overdraft
(b) Long-term Loans
(c) Short-term loans
(d) Creditors
Ans – (b)
Goodwill is a/an
(a) Tangible Asset
(b) Intangible Asset
(c) Current Asset
(d) Fictitious Asset
Ans – (b)
Current Liabilities include:
(a) Bills Payable
(b) Creditors
(c) Outstanding Expenses
(d) All of the above
Ans – (d)
Which of the following is capital expenditure?
(a) Wages
(b) Wages paid for building construction
(c) Repair expenses of building
(d) Advertisement Expenses
Ans – (b)
Expenditure of revenue nature that gives benefit for more than one accounting period is shown as
(a) Deferred Revenue Expenditure
(b) Capital Expenditure
(c) Revenue Expenditure
(d) None of these
Ans – (a)
Which of the following is Revenue Expenditure?
(a) Repair Expenses
(b) Building Construction Expenses
(c) Expenses on purchase of Machinery
(d) Purchase of Investments
Ans – (a)
A person who owes money to the firm is called __ .
(a) Debtor
(b) Creditor
(c) Supplier
(d) None of these
Ans – (a)
A person who owes amount to a firm for goods sold on credit is a
(a) Creditor
(b) debtor
(c) Both (a) and (b)
(d) None of these
Ans – (b)
A person to whom money is owed by the firm is called __ .
(a) Debtor
(b) Creditor
(c) Customer
(d) None of these
Ans – (b)
Goods means:
(a) Commodity to be bought and sold
(b) Commodity to be bought but not to be sold
(c) Commodity to be used as an asset
(d) All of the above
Ans – (a)
A person to whom amount is owed by a firm for purchase of goods on credit is a
(a) Creditor
(b) debtor
(c) Both (a) and (b)
(d) None of these
Ans – (a)
Trade Discount is:
(a) Which is allowed at the time of receiving the payment
(b) Which is allowed at the time of sale of goods
(c) Which is allowed both at the time of receiving payment and sale of goods
(d) Allowed in all of the above
Ans – (b)
The person, firm or institution who does not pay the price in Cash for the goods purchased or the services received is called:
(a) Proprietor
(b) Debtor
(c) Creditor
(d) All of these
Ans – (b)
Purchase means purchase of
(a) goods for resale
(b) stationery for office use
(c) assets for the factory
(d) None of these
Ans – (a)
Trade Discount allowed:
(a) is shown separately in the books of account
(b) Is not shown in the books of accounts
(c) Can be shown either separately or deducted from purchase cost
(d) All of the above
Ans – (b)
A liability arises because of
(a) Cash transactions
(b) credit transactions
(c) cash as well as credit transactions
(d) None of these
Ans – (b)
The amount invested by the proprietor in a business is termed
(a) capital
(b) cash
(c) revenues
(d) loan
Ans – (a)
Cash Discount is:
(a) Which is received at the time of making the payment
(b) Which is allowed at the time of sale of goods
(c) Which is received at the time of purchase of goods
(d) Which is received both at the time of making payment and purchase of goods
Ans – (a)
Current assets do not include:
(a) Debtors
(b) Motor Car
(c) Bank Balance
(d) Prepaid Expenses
Ans – (b)
Stock is valued at
(a) Cost or Net Realisable Value (Market Value), whichever is less
(b) Cost or Net Realisable Value (Market Value), whichever is more
(c) cost
(d) Net Realisable Value (Market Value)
Ans – (a)
Tangible Assets do not include:
(a) Goodwill
(b) Furniture
(c) Stock
(d) Cash
Ans – (a)
Intangible Assets do not include:
(a) Patents
(b) Trade Marks
(c) Stock
(d) Prepaid Expenses
Ans – (c)
Bank Overdraft is
(a) Short-term liability
(b) Long-term liability
(c) Contingent liability
(d) None of these
Ans – (a)
Wasting Assets do not include:
(a) Mines
(b) Patents
(c) Land and Buildings
(d) Trade Marks
Ans – (c)
Current Liabilities include:
(a) Debentures
(b) Bills Payable
(c) Long-term Loans
(d) Capital
Ans – (b)
Which of the following term increases capital?
(a) Drawings
(b) Expenses
(c) Loss
(d) Profit
Ans – (d)
Which of the following is not a fixed asset?
(a) Building
(b) Plant and Machinery
(c) Balance with bank
(d) Goodwill
Ans – (c)
Current Liabilities do not include:
(a) Sundry Creditors
(b) Bills Payable
(c) Outstanding Salaries
(d) Prepaid Insurance
Ans – (d)
Patent is:
(a) Tangible Asset
(b) Intangible Asset
(c) Current Asset
(d) None of the above
Ans – (b)
Which of the following is not a long-term liability?
(a) Creditors
(b) Term-loan
(c) Debentures
(d) Capital
Ans – (a)
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
Ans – (d)
Maruti Car is:
(a) Current Asset
(b) Intangible Asset
(c) Tangible Asset
(d) None of the above
Ans – (c)
Any expenditure, the full benefit of which is received during one accounting period is termed as:
(a) Current Liability
(b) Current Asset
(c) Capital Expenditure
(d) Revenue Expenditure
Ans – (d)
Which of the following is an asset?
(a) Machinery
(b) Purchases
(c) Sales Return
(d) Interest Received
Ans – (a)
Which of the following is a liability?
(a) Furniture
(b) Rent Payable
(c) Interest Received
(d) Stock
Ans – (b)
Which of the following will be treated as drawings:
(a) Withdrawing money for payment of salary to employees
(b) Withdrawing money for payment to creditors
(c) Withdrawing money from business for private expenses
(d) Withdrawing money for purchase of asset
Ans – (c)
Main feature of business transaction is:
(a) It involves an economic activity
(b) It results in a change in the financial position of the firm
(c) Change must be capable of being expressed in terms of money
(d) All of the above
Ans – (d)
Which of the following is revenue?
(a) Purchases
(b) Purchases Return
(c) Sales
(d) Salary Payable
Ans – (c)
Which of the following is not an expense?
(a) Furniture
(b) Salary
(c) Rent
(d) Electricity Expenses
Ans – (a)
Current Liabilities do not include:
(a) Bills Payable
(b) Creditors
(c) Outstanding Exp.
(d) Debentures
Ans – (d)
Which of the following is a business transaction?
(a) Goods purchased on credit
(b) An employee being dismissed
(c) Proprietor purchasing a car for personal use
(d) Sale of personal asset by the proprietor
Ans – (a)
The nature of capital is
(a) an asset
(b) a liability
(c) an income
(d) an expense
Ans – (b)
The term sales is sued only for the sales of and is never used for the sale of ___ .
(a) Assets, Investments
(b) Assets, Goods
(c) Intangible Assets, Goods
(d) Goods, Assets
Ans – (d)
Out of the following assets which one is NOT an intangible asset?
(a) Patents
(b) Investments
(c) Goodwill
(d) Trademark
Ans – (b)
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
Ans – (b)
The nature of accrued income is
(a) revenue
(b) liability
(c) expenses
(d) asset
Ans – (d)
At the end of financial year, during which sale of goods was worth ₹ 5,00,000, the closing stock is valued at ₹ 40,000. This is _ .
(a) An event
(b) A transaction
(c) Both an event as well as transaction
(d) None of (A) and (B)
Ans – (c)
Which of the following is the Capital Expenditure?
(a) Wages paid for repair of building
(b) Wages paid for white washing of building
(c) Wages paid for construction of building
(d) Wages paid for cleaning of building
Ans – (c)
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
Ans – (b)
Which of the following transaction is not of financial character?
(a) Purchase of asset on credit
(b) Purchase on asset for cash
(c) Withdrawing of money by proprietor from business
(d) Strike by employees
Ans – (d)
Consider the following items:
- Prepaid Salary
- Accrued Interest (Receivable)
- Loan (Short term)
- Bank Overdraft
Current Liability would include:
(a) 1, 2, 3, 4
(b) 2, 3, 4
(c) 4, 3, 1
(d) 3, 4
Ans – (d)
Purchase refers to the buying of
(a) Stationery for office use
(b) Assets for the factory
(c) Goods for resale
(d) Investment
Ans – (c)
Goods means
(a) Items purchased for own consumption
(b) Items purchased for donation
(c) Items purchased for resale
(d) Items purchased for use in business
Ans – (c)
Goods used from stock of the business for business purposes are treated as the _ business but similar goods used by the proprietor for his personal use are treated as _ .
(a) Inventory, expenditure
(b) Drawings, expenditure
(c) Drawings, inventory
(d) Expenditure, drawings
Ans – (d)
Livestock includes:
(a) Stock
(b) Goods
(c) Animals
(d) Life Insurance Policy
Ans – (c)
Out of the following assets, which one is not an intangible asset?
(a) Investment
(b) Patents
(c) Goodwill
(d) Trade Mark
Ans – (a)
Which of the following transaction can not be measured in money terms?
(a) Purchase of asset on credit
(b) Purchase of asset for cash
(c) Withdrawal by proprietor
(d) Quality of employees
Ans – (d)
Profit is:
(a) Revenue – Expenses
(b) Assets – Capital
(c) Assets – Liabilities
(d) Revenue + Expneses
Ans – (a)
Revenue – Expenses is
(a) Asset
(b) Liability
(c) Equity
(d) Income
Ans – (d)
Consider the following items:
(i) Prepaid salary
(ii) Accrued Interest
(iii) Short-term Loan
(iv) Bank overdraft
Current Assets would include
(a) (i), (ii), (iii), (iv)
(b) (ii), (iii), (iv)
(c) (iv), (iii), (I)
(d) (i), (ii)
Ans – (d)
