Accounting Cycle MCQs

1. Double entry bookkeeping means that?

(a) Entry in two sets of accounting books (c) Entry for two aspects of transaction

(b) Entry at two dates (d) All of above

2. Which one the following document is prepared for documentary evidence by business?
(a) Invoice (c) Receipt

(b) Voucher (d) All of above

3. The basic sequence in the accounting process can best be described as?
(a) Transaction, journal entry, source document, ledger account, trial balance

(b) Source document, transaction, ledger account, journal entry, trial balance

(c) Transaction, source document, journal entry, ledger account, trial balance

(d) Transaction, source document, journal entry, trial balance, ledger account

4. Revenue is generally recognized being earned at the point of time when?

(a) Cash is received (c) Production is completed

(b) Billed to customers (d) Goods are delivered

5. The accounting system, in which accounting entries are made on the basis of amount
having become due for payment or receipt, is known as?
(a) Cash system of accounting (c) Accrual system of accounting

(b) Current accounting period (d) None of the given options

6. Bookkeeping is mainly concerned with?

(a) Recording the Economic Activities (c) Designing the systems for recording,
classifying and summarizing
(b) Interpreting the data
(d) All of Above

7. Which one of the following system of recording transaction has a dual aspect concept of
accounting?
(a) Cash system of accounting (c) Accrual system of accounting

(b) Single entry system (d) Double entry system

8. The documents relating to purchase of asset must be authorized by?

(a) Senior management (c) Lower level management

(b) Middle management (d) None

9. Accrual-basis of accounting?
(a) Result in higher income than Cash-basis of accounting ?

(b) Is not acceptable under GAAP

(c) Leads to the reporting of more complete information than does cash-basis

(d) None of Above

10. A manufacturer is considering the point at which a transaction can be recognized within
its profit and loss account. At which of the following stages is this permitted?
(a) Products accepted by customer (c) Sample products requested by customer

(b) Product manufactured (d) Order placed for the goods

11. A company sold Rs. 400,000 of merchandise for cash and Rs. 120,000 of merchandise to
credit customers who will pay for the merchandise in a later time period. How much revenue
should be reported on the income statement of the current time period?
(a) Rs. 120,000 (c) Rs. 400,000

(b) Rs. 280,000 (d) Rs. 520,000

12. Voucher is used to record transactions that do not affect cash or bank?
(a) Payment Voucher (c) Journal Voucher

(b) Cash Voucher (d) None of these

13. Items such as a sales slip, a check, a bill, or invoices are examples of?
(a) Balance sheet accounts (c) Cost of goods sold

(b) Income statement accounts (d) Source documents

14. In the purchasing procedure which document will usually follow the goods received note?
(a) Delivery note (c) Statement

(b) Invoice (d) Advice note

15. Which of the following is an advice of employee earning?

(a) Advice note (c) Pay slip

(b) Purchase order (d) Quotation

16. A Journal entry which requires more than two accounts is called?
(a) Double entry (c) Combined entry

(b) Compound entry (d) None

17. Accounting which recognizes an event as the transaction when cash is received or paid?
(a) Cash basis of accounting (c) Cost accounting

(b) Accrual basis of accounting (d) None of the above

18. Which of the following presents key aspects of the process of accounting in the correct
chronological order?
(a) Communicating, recording, and identifying (c) Recording, totaling, and identifying

(b) Recording, identifying, and communicating (d) Identifying, recording, and communicating

19. Losses normally have?

(a) Credit balance (c) Not mentioned

(b) Debit balance (d) a and b

20. Which of the following is not a voucher?

(a) Receipt voucher (c) Journal voucher

(b) Payment voucher (d) Ledger voucher

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