Q.

1 OBJECTIVE
ACCOUNTANCY
CHAPTER QUESTIONSPAPER
PRACTICE
1 – INTRODUCTION (1 mark
TO each) 11
- GRADE
ACCOUNTING (10)
1) The person, firm, or institution who does not pay the price in cash for the
goods purchased or the services received is called ______.

(a) Creditor
(b) Proprietor
(c) Debtor
(d) Shareholder
2) Which qualitative characteristics of accounting information are reflected when
accounting information is clearly presented?

(a) Comparability
(b) Understandability
(c) Relevance
(d) Reliability
3) The process of recording, classifying, and summarising all business transactions
in order to know the financial result is called ______.

(a) Bookkeeping
(b) Accounting
(c) Journalising
(d) Ledger
4) Which of the following is not a business transaction?

(a) Bought furniture of Rs. 10,000 for business

(b) Paid for salaries of employees Rs. 5,000
(c) Paid son’s fees from her personal bank account Rs. 20,000
(d) Paid son’s fees from the business Rs. 2,000
5) Which of the following limitations of accounting states that accounts may be
manipulated to conceal vital facts?

(a) Accounting is not fully exact

(b) Accounting may lead to window dressing
(c) Accounting ignores price level changes
(d) Accounting ignore qualitative elements
6) The unsold goods left at the end of the year is called ______.
7) The head under which transactions pertaining to a person, institution, firm,

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 expenses, assets etc. are recorded is called _____.
8) Profit & loss is calculated by ________ Accounting.
9) The goods invested at the commencement of the business is called Drawings.
(True or False)
10) Cash is a fixed asset for a business. (True or False)
Q.2 SHORT ANSWERS (3 marks each) (6)
a) List and Explain the Qualitative Characteristics of Accounting
Information.
b) Describe the Internal and External users of Accounting Information.

CHAPTER 2 – BASIC ACCOUNTING TERMS

Q.1. OBJECTIVE QUESTIONS ( 1 mark each) (5)

1) Expenditure of Revenue nature that gives benefit for more than one accounting
period is categorised as

(a) Capital Expenditure

(b) Revenue Expenditure
(c) Receipt
(d) Deferred Revenue Expenditure
2) A person who owes money to a firm against goods sold is called a _______.
3) Stock is valued at ____________________.

(a) Cost or Market value whichever is lower

(b) Cost or Market value whichever is higher
(c) Cost
(d) Net Realisable value (Market value)
4) The nature of accrued income is ________.

(a) Revenue
(b) Liability
(c) Expense
(d) Asset

5) Long term assets without any physical existence but, possessing a value are called
__________.

(a) Intangible assets

(b) Fixed assets
(c) Current assets

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 (d) Stock
Q.2. SHORT ANSWERS (3 marks each) (6)
a) Write a note on Types of Liability with one example of each.
b) Explain the following terms :
- Fictitious Asset
- Capital Expenditure
- Outstanding Expense

CHAPTER 4 & 7 – BASES OF ACCOUNTING & SOUCE DOCUMENTS

Q.1. OBJECTIVE QUESTIONS ( 1 mark each) (5)

1) If total sales during the year were Rs. 40,000 , out of which Rs. 5,000 cash
received during the year and bad debts were Rs. 1,000. The amount of revenue
recognised as realised following accrual basis of accounting will be ______.

(a) 50,000
(b) 80,000
(c) 40,000
(d) 34,000
2) Advance expense paid is recorded in ______ basis of accounting.
3 A source document prepared by the seller of goods on credit is known as
) _______.

(a) Cash Memo

(b) Receipt
(c) Invoice
(d) Pay-in-slip

4 ______________ are the evidence of business transactions which provide

) information about the nature of the transaction and the amount involved in it.
5 Trahan has returned goods Rs. 15,000 to Roma as he found it damaged. Which
) source of document will be prepared by Roma?

(a) Credit Note

(b) Debit Note
(c) Credit Voucher
(d) Invoice
Q.2. SHORT ANSWERS (3 marks each) (6)
a) Give any three differences between cash basis and accrual basis of
accounting?
b) What are accounting vouchers? Explain its types.

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CHAPTER 5 – ACCOUNTING EQUATION

Q.1. OBJECTIVE QUESTIONS ( 1 mark each) (5)

1) The assets which are convertible into cash or cash equivalents within a year are
known as _________.

(a) Fixed assets

(b) Current assets
(c) Tangible assets
(d) Non-current assets
2 Which of the following accounts will be affected by a transaction where the
) company receives from a debtor?

(a) Owner’s equity and cash

(b) Owner’s equity and debtors
(c) Debtors and cash
(d) Capital and Debtors
3) State one transaction due to which One liability increases while another
liability decreases.
4) Gautam started a cloth business on 1st April,2015 with a capital of
Rs.1,50,000. On 31st March,2016 his assets worth Rs. 3,60,000 and liabilities
Rs. 1,20,000.Profit earned during the year will be _______.

(a) Rs. 90,000

(b) Rs. 1,00,000

(c) Rs. 45,000

(d) Rs. 78,000

5) If total assets of a business are Rs. 1,50,000 and capital is Rs. 70,000,
Calculate the amount of outside liabilities.

(a) Rs. 50,000

(b) Rs. 80,000

(c) Rs. 70,000

(d) Rs. 20,000

Q.2. PRACTICAL PROBLEMS (4 marks each) (12)

a) Prepare Accounting Equation from the following:
1.Nitin started business with cash ₹75,000; goods ₹30,000; Machinery
₹50,000 and Furniture ₹25,000.

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 2. 1/3rd of the above goods sold at a profit of 10% on cost and half of the
payment is received In cash.
3.Depreciation on Machinery provided at 10%.
4. Goods sold to Jacob for ₹5,000 and received a Bill Receivable for the same
amount for three Months.
b) Prepare an Accounting Equation from the following:
1. Started the business with Cash ₹1,00,000; goods ₹50,000 and loan
₹15,000.
2. Goods costing ₹24,000 sold at a profit of 33 1/3 % and 3/4th payment
received in Cash.
3. Paid three months’ rent in advance for office ₹6,000.
4. Goods withdrawn for personal use ₹10,000.
c) On 31st March,2022, the total assets and external liabilities were Rs.
1,00,000 and Rs. 3,000 respectively. During the year, the proprietor had
introduced additional capital of Rs. 10,000 and had withdrawn Rs. 6,000 for
personal use. He made a profit of Rs. 10,000 during the year. Calculate the
capital as on 1st April,2021.

CHAPTER 6 & 8 – ACCOUNTING PROCEDURES & JOURNAL

Q.1. OBJECTIVE QUESTIONS ( 1 mark each) (5)

i. Goods returned by customer will be debited to which account?

(a) Purchase A/c

(b) Return outward
(c) Customer’s A/c
(d) Return inward
2 Which account will be debited on case of Life insurance premium is paid by
) the proprietor from business cash?

(a) Drawing’s A/c

(b) Insurance A/c
(c) Cash A/c
(d) Capital A/c
3) The bad debts written off as bad, if recovered subsequently, should be
credited to ____________ A/c
4) As per Modern Classification of accounts, Accrued Income is _______.
5) Journal is also called a book of original entry. Why?

Q.2. PRACTICAL PROBLEMS (4 marks each) (12)

a) Journalise the following transactions:

DATE TRANSACTION

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 1st Apr’2022 Rahul who owed Rs. 5,000 was declared insolvent
and 60 paise in a rupee were received.
4th Apr’2022 Provide depreciation @ 10% on furniture costing Rs.
10,000 for 2 months.
10th Apr’2022 Issued a cheque in favour of M/s Param Singh & Sons
on account of purchase of goods worth Rs. 7,500.
17th Apr’2022 Goods sold costing Rs. 6,000 to Ram at an invoice
price 10% above cost less 5% trade discount.

b) Pass Journal Entries:

i) Opening balances are Cash in hand Rs. 44000 , Bank balance Rs. 9000 ,
Stock Rs. 17375 , Furniture Rs. 7600 , Machinery Rs. 92000 , Debtor Rs.
15000 , Creditor Rs. 40000 and Bank Loan Rs. 70000.
ii) Paid cartage on behalf of customer Mr. Ravi Rs. 400.
iii) Goods uninsured worth Rs. 3,000 were destroyed by fire.
iv) Received from Govind Rs. 4,800 in full settlement of his account of Rs.
5,000.
c) Journalise the following transactions:

DATE TRANSACTION
1st Nov’2022 Received from Pankaj Rs. 50,000 by cheque on
account against dues of Rs. 60,000.
7th Nov’2022 Ramesh’s cheque returned by the bank as
dishonoured Rs. 9,000.
21st Nov’2022 Rent due to landlord Rs. 8,000
28th Nov’2022 Provide 9% interest on capital amounting to Rs.
6,00,000.

Q.3. Journalise the following transactions in the books of Happy Bros. (6)

DATE TRANSACTION
1st Jan’2022 Goods worth Rs. 2,000 were used by the proprietor.
5th Jan’2022 Opened bank account with H.D.F.C. Rs. 50,000
15th Jan’2022 Goyal traders returned goods 3,500
22th Jan’2022 Cheque received from M/s Lara India for final
settlement 11,500 and deposited same day into bank
25th Jan’2022 Sold to Garima for Rs. 1,00,000, allowed her 20% trade
discount and 5% cash discount if the payment is made
within 15 days. She paid 1/4th of the amount by cheque
on 5th February and balance on 15th February.
29th Jan’2022 Received cash from a debtor written off as bad debts
last year Rs.2,000.

CHAPTER 9– LEDGER

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Q.1. OBJECTIVE QUESTIONS ( 1 mark each) (5)
1) Which of the following item will be appearing on the credit side of the
ledger account?

(a) Discount received

(b) Cash received
(c) Rent expenses
(d) Purchases
2 Exe Co. which purchased 50 computers from HCL, made payment
) immediately. As a result, HCL gave it a discount of Rs. 10,000. Is the discount
received Trade Discount or Cash Discount? How will it be recorded in the
books of accounts?
3) Sale of old furniture to Paresh for cash should be debited to Paresh’s
Account. (True or False)
4) Which of the following account balance is decreased by debit balance?

(a) Land Account

(b) Creditor’s Account
(c) Debtor’s Account
(d) Rent Account
5) Rajani who trades in electronic goods, gifted a television to his daughter.
Will it be recorded in the books of account? What will be the Journal entry?

6) ‘Debit what comes in, Credit what goes out’ is the rule for ________

Q.2. PRACTICAL PROBLEMS (4 marks each) (12)

a) Following transactions took place during the month of August,2022. Post
them into ledger:-

1st August,2022 - Commenced business with cash Rs. 1,10,000

7th August,2022 - Purchased good from M/s Hema Traders Rs. 42,000
15th August,2022 - Goods return to M/s Hema Traders Rs. 2,000
22th August,2022 - Bought postage stamps Rs. 100

You are required to prepare Cash A/c and Creditor’s (M/s Hema
Traders) A/c.

b) Following balances appeared in the books of Ram & Sham on January 1,

2017 :−
Assets : Cash in hand ₹ 30,000; Stock ₹ 36,000; Lal Chand ₹ 7,600;
Mukesh Khanna ₹ 16,200; Furniture ₹ 8,000.
Liabilities : Ghanshyam ₹ 6,000; Vinod ₹ 8,000.
Following transactions took place during Jan. 2017 :−
DATE TRANSACTIONS

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 2nd Jan,2017 Paid for Life Insurance Premium of the Proprietor ₹
1,600
14th Jan,2017 Sold goods for Cash of the list price of ₹ 25,000 at
20% trade discount and 5% Cash discount.
19th Jan,2017 Sold goods to Gopal Seth for ₹ 10,000.
23rd Jan,2017 Gopal Seth returned goods for ₹ 1,500.

Prepare Ledger for Capital A/c and Debtor’s (Gopal Seth) A/c.
c) Open ‘T’ shape account for Machinery and write the following on the
proper side:
(i) Machinery purchased for Rs. 2,00,000
(ii) Paid for installation of machinery Rs. 1,00,000
(iii) Old machinery sold for cash Rs. 50,000
(iv) Machinery destroyed by fire Rs. 50,000

CHAPTER 14 – TRIAL BALANCE

Q.1 Prepare the Trial Balance from the following balances of Akshat ltd. (4)
Particulars Amount
Discount received 1,200
Bank Overdraft 19,000
Goodwill 1,00,000
Capital 89,000
Sales 78,000
Trade Expenses 14,000
Bank 45,000
Carriage inward 28,200