Chapter-4: Capital and Revenue Transactions: MCQ

Chapter-4: Capital and Revenue Transactions

Exercise

Multiple-choice Questions(MCQ)

1. Which one is the Capital Expenditure?

[a] Capital invested by the owner

[b] Selling expense for machine

[c] Machine purchased

[d] Daily expenses to operate business

2. If capital expense is recorded as revenue expense then which calculation will be wrong?

[a] Bank balance

[b] Debtors

[c] Creditors

[d] Net profit

3. Capital expenditure –

i. Car purchased for sale

ii. Machine purchased for business use

iii. Road tax and insurance premium of delivery van

Which one is correct of the following?

[a] i & ii

[b] ii & iii

[c] i & iii

[d] i, ii & iii

4. Sale of machine of machine merchandising business –

[a] Capital receipt

[b] Capital income

[c] Revenue income

[d] Revenue receipt

5. Ramjan Mia import goods for his business. Import duty of goods is –

[a] Capital expenditure

[b] Revenue expenditure

[c] Non-trading expenditure

[d] Revenue income

6. Shukomol Borua purchased a land for his business. He paid tk.5,000 for land’s registration. This registration expenses is –

[a] Revenue expenditure

[b] Capital expenditure

[c] It can be both capital and revenue expenditure

[d] Deferred revenue expenditure

7. In comprehensive income statement we record -

i)    Revenue receipt

ii)   Revenue income

iii)  Capital expenditure

Which one is correct of the following?

[a] i & ii

[b] ii & iii

[c] i & iii

[d] ii

8. In statement of financial position we record

i. Capital receipt

ii. Revenue expenditure

iii. Deferred Revenue expenditure

Which one is correct of the following?

[a] i

[b] i& ii

[c] ii & iii

[d] i & iii

9. What type of transaction is Freight in word-

[a] Revenue

[b] Capital

[c] Deferred revenue

[d] Operating

10. Deferred Revenue expenditure ----

i)    Paid tk.1,00,000 to Adv. Firm for publicity of goods for 3 years

ii)   Paid rent in advance for 3 months tk.15,000

iii)  Cost of Business transfer cost tk.25,000 from Dhanmondi to Motijheel

Which one is correct of the following?

[a] i

[b] i& ii

[c] ii & iii

[d] i & iii

Considering the following information answer the questions no. 11, 12 &13:

On 1 January 2008 Mr. Plabon Voumik purchased a machinery for his business valued tk.40,000 and paid for its installation tk.5,000. He sold this machinery for tk.25,000 in 2011, At this time remaining price of this machinery was tk.24,000 after deducting depreciation.

11. Amount spent tk.45,000 of  Plabon Voumik considered as -

i)    Capital receipt

ii)   Capital expenditure

iii)  Deferred Revenue expenditure

Which one is correct of the following?

[a] i

[b] ii

[c] i & ii

[d] ii & iii

12. What was the total amount of depreciation charged in 4 years?

[a] tk. 15,000

[b] tk. 16,000

[c] tk. 20,000

[d] tk. 21,000

13. The difference between selling price and present book value of machinery is called.

[a] Capital income

[b] Revenue income

[c] Revenue receipt

[d] Capital receipt

[Answer key: 1(c), 2(d), 3(b), 4(d), 5(b), 6(b), 7(b), 8(d), 9(a), 10(b), 11(b), 12(d), 13(a)]  

Chapter-3: Double Entry System: MCQ

Chapter-3: Double Entry System

Exercise

Multiple Choice Questions(MCQ)

1. Double Entry System is a –

[a] Reporting system

[b] Financial Statement preparation system  

[c] Recording system

[d] Debit and Credit determining system

2. The features of Double Entry System are-

i) It has two parties; Receiver and Giver

ii) Total amount of Debit will be equal to total amount of Credit

iii) Receiver is Debit and Giver is Credit.

Which one is correct?

[a] i & ii  

[b] ii & iii

[c] i & iii  

[d] i, ii & iii

Considering the following information answer questions no. 3, 4 & 5:

Mr. Subir Roy keeps the purchase book, sales book, bills receivable book, bills payable book etc. for his business institution. Beside this, he records the discounted entries in other way, because he has clear concept about accounting. Then he prepares the financial statement for knowing about the financial position of the business. And this is how, he operates his business continuously.

3. In purchase book, Mr. Subir Roy records-

[a] Credit purchase

[b] Credit sales  

[c] Cash purchase

[d] Purchase return

4. Mr. Subir Roy records the discounted entries in the-

[a] Cash book   

[b] Sales return book   

[c] Bills receivable book

[d] Journal proper

5. Why is opening entry needed for Mr. Subir?

[a] To follow the accounting cycle

[b] To start the next accounting year  

[c] To justify the arithmetical

[d] To know the financial position of accuracy current year

6. Generally, what type of accounts is not kept in Single entry system?   

i)  Asset     

ii) Income     

iii) Expense

Which one is correct of the following?

[a] i

[b] i & ii

[c] ii & iii

[d] i & iii

7. Which one is correct?

[a] Opening capital = opening total assets - closing total assets   

[b] Closing capital = opening total liabilities + closing total liabilities   

[c] Opening capital = opening total assets - opening total liabilities

[d] Closing capital = opening total assets + closing total assets

8. Which one is used a rough working for financial statement?

[a] Trial balance 

[b] Adjusting entries  

[c] Closing entries   

[d] Works sheet

9. Which sequence is correct?

[a] Trial balance, adjusting entries, works sheet, financial statement

[b] Adjusting entries, trial balance, financial statement, works sheet

[c] Works sheet, trial balance, adjusting entries, financial statement  

[d] Trial balance, works sheet, adjusting entries, financial statement

10. If opening capital is tk.70,000 and closing capital is tk.90,000, what is the  amount of profit or loss?

[a] Profit tk.20,000  

[b] Loss tk.20,000

[c] Loss tk.70,000   

[d] Profit tk.90,000

11. Which one is the principle of Double Entry System?

[a] Purchase increases Debit, income decreases Credit

[b] Expense increases Debit, Income decreases Credit

[c] Receiver is Debit and Giver is Credit

[d] Receiver is Credit and Giver is Debit

12. Now-a-day’s base of accounting is  

i) Cost accounting system  

ii) Single entry system     

iii) Double entry system

Which one is correct of the following?

[a] i  

[b] ii  

[c] iii

[d] i & iii

From the following information, answer the questions no. 13, 14, & 15:

On 1st June 2012 Mr. Ishmam started a fast food shop with stock of goods of tk. 55,000 at Baily Road in Dhaka. The following transactions occurred in his business in that month:

Jun-05	Sold goods to Shahed tk.5,000;
Jun-12	Goods purchased tk.12,000;
Jun-20	Sold goods on credit tk.35,500;
Jun-23	Cash received from Rafi tk.5,400;
Jun-28	Goods returned to seller tk.3,400.

13. Which transactions will be recorded in the journal proper of Mr. Ishmam?

[a] Sold goods in cash

[b] Sold goods on credit

[c] Goods returned to seller

[d] Started with stock of goods

14. In which book the transactions occurred on June 05 and 20 will be recorded?  

[a] Purchase journal

[b] Purchase return journal  

[c] Sales journal

[d] Sales return journal

15. Mr. Ishmam will prepare on returning goods –

[a] Debit note  

[b] Credit note  

[c] Debit voucher  

[d] Credit voucher

[Answer Key: 1(d), 2(a), 3(a), 4(a), 5(b), 6(b), 7(c), 8(d), 9(a), 10(a), 11(c), 12(c), 13(d), 14(c), 15(a)]  

Chapter-2: Transaction : MCQ

Chapter-2: Transaction

Exercise

Multiple Choice Questions(MCQ):

1. Which of the following is only an event for the business?

[a] Goods bought from Jamal on credit tk.2,000.

[b] Goods sold to Palash tk.6,000.

[c] Placed an order to buy goods tk.2,000 form Tania.

[d] Goods returned in from Polash tk.2,500

2. Events related to transactions are ------

i) Always visible

ii) Both visible and invisible

iii) Never visible

Which one is correct?

[a] i

[b] ii

[c] i and ii

[d] i and iii

3. Debit Note is used for

[a] Goods bought on credit returned out

[b] Goods sold on credit returned in

[c] Goods bought for cash returned out

[d] Goods sold for cash returned in

4. A = L + E in this equation E signifies -

[a] Asset

[b] Owner’s Equity

[c] Liability

[d] Profit

5. Which of the following is only an event for the business?

[a] Purchased goods from Joli on credit tk.2,000.

[b] Goods sold to Poly worth tk.6,000.

[c] Placed an order to buy goods tk.5,000 from Tuli.

[d] Goods returned in from Polash tk.3,500.

6. Events related to transactions are ------

i) Always visible

ii) Both visible and invisible

iii) Never visible

Which one is correct?

[a] i

[b] ii

[c] i and ii

[d] i and iii

From the following information answer question no 7, 8 and 9

Mr. Monir Hossain started business with tk. 50,000 on January 1, 2012. Goods sold to Dipok amounting to  tk. 10,000, Value of goods worth tk. 3,000 was returned. He personally contribute to a school tk. 2,000 as donation.

7. Starting business with tk. 50,000 which element of business is going to be affected by this?

[a] Asset

[b] Liability

[c] Asset and liability

[d] Asset and Owner’s Equity

8. The note provided by Monir for goods returned by Dipok will be ---

i) Debit Note

ii) Credit Note

iii) Debit and Credit Note

Which one is correct?

[a] i

[b] ii

[c] iii

[d] i and ii

9. Donating tk. 2,000 in the school will affect in the business

[a] Asset will decrease

[b] Capital will decrease

[c] Goodwill will decrease

[d] Nothing will happen

10. ‘Withdrawn for personal use’—in the accounting equation-------

i) A will decrease

ii) L will decrease

iii) E will decrease

Which one is correct?

[a] i

[b] ii

[c] i and ii

[d] i and iii

11. Which one is wrong? By transaction-----

i) Owner’s Equity increases if total asset decrease

ii) Total liability decreases if total asset increase

iii) If one asset increases, the other assets will also decrease

Which one is correct?

[a] i and ii

[b] ii and iii

[c] iii

[d] i and iii

12. Which one is correct?

[a] A = L – E

[b] E = A – L

[c] L = A + E

[d] A + L = E

[Answer Key: 1(c), 2(b), 3(a), 4(b), 5(c), 6(b), 7(d), 8(b), 9(d), 10(d), 11(a), 12(b)]