Chapter – 1: Basic Terms and Concepts(I.

com-1)

Lahore Board – 2004

1. Equity of creditors is called:
(a) Capital (b) Assets (c) Liabilities (d) None of these
2. Cash or goods taken away by proprietor for personal use are called:
(a) Purchases (b) Assets (c) Goods (d) Drawings
3. The equity of the owner is called:
(a) Liability (b) Capital (c) owner’s equity (d) Both ‘b’ and ‘c’
are correct
4. The systematic recording of financial transaction of an enterprise is known as:
(a) Accounting (b) Book keeping (c) Posting (d) Journalizing
5. Cash discount is provided on:
(a) Purchases (b) Current assets (c) Prompt payment (d) Sales return
6. The art of recording, classifying and summarizing the business transaction is
called:
(a)Journalizing (b) Accounting (c) Book keeping (d) Auditing
7. Book keeping provides the:
(a) Primary information (b) Secondary information (c) Final information (d)
All of these
8. Merchandise returned to the supplier is called:
(a) Sales return (b) Merchandise return (c) Return inward (d)
Purchase return
9. A person who owes money to the business is called:
(a) Creditor (b) Debtor (c) Owner (d) Shareholder
Lahore Board – 2005
10.Goods purchased for resale purpose is called:
(a) Purchases (b) sales (c) assets (d) none of these
12.All the events relevant to business can be measured in terms of:
(a) Money (b) Ethical values (c) Units (d) Goods
13.The owner of the business is known as:
(a) Proprietor (b) Agent (c) Employee (d) None of these
14.Goods returned to the customer are known as:
(a) Sales return (b) Purchases return (c) Both of these (d) None of these
15.Debts or Obligation of business are known as:
(a) Expenses (b) Revenue (c) Liabilities (d) Assets
16.Sundry debtors are also known as:
(a) Account receivable (b) Account payable (c) Book debts (d) both ‘a’ and ‘c’
17.Any written evidence in support of business transaction is called:
(a) Transaction (b) Account (c) Voucher (d) None of these
18.Cash brought by owner to start business is called:
(a) Capital (b) Loan (c) Drawing (d) None of these

Lahore Board – 2006

19.Accounting is also referred to as the language of:
(a) Computer (b) Math (c) Business (d) Community
20.The possession of business:
(a) Liabilities (b) Expenses (c) Revenues (d) Assets
21.Trade discount is provided on:
(a) List price (b) schedule price (c) Both (d) None of these
22.Goods returned by customer are known as:
(a) Sales return (b) Purchase returns (c) Both (d) none of these.
23.When saleable goods are bought in a business, it is said to be:
(a) Sales (b) Purchases (c) Goods (d) None of these
24.The person to whom goods are sold on credit is called:
(a) Seller (b) Buyer (c) Debtor (d) Creditor
25.The language of business:
(a) Economics (b) Accounting (c) Both (d) None of these
26.The amount of cash or goods invested by proprietor in a business is called:
(a) Expense (b) Asset (c) Capital (d) Revenue
27.Cash discount is provided on:
(a) Sales (b) Purchases (c) Prompt payment (d) All of these
Lahore Board – 2007
28.Accounting is called of business:
(a) Heart (b) Eye (c) Ear (d) Tongue
29.Personal Use is called:
(a) Expenses (b) Capital (c) Revenue (d) Drawings
30.The discount which is calculated on the list price of goods is called:
(a) Trade discount (b) Cash discount (c) Rebate (d) None of these
31.Accounting is the language of;
(a) Govt (b) Business (c) Trade (d) Commerce
32.The amount of cash or goods withdrawn by the proprietor for personal Use is
called:
(a) Expenses (b) Capital (c) Revenue (d) Drawings
33.Cash or goods invested by proprietor into the business is called:
(a) Investment (b) Drawings (c) Capital (d) None of these
34.The person to whom goods are sold on credit is called:
(a) Seller (b) Debtor (c) Creditor (d) Buyer
Lahore Board – 2008
35.The science and art of correctly recording business dealing in a set of books is
called:
(a) Book keeping (b) Accounting (c) Auditing (d) Recording
36.Business debts are also called as its:
(a) Capital (b) Drawing (c) Liabilities (d) Assets
37.Sales return also called as
(a) Return inward (b) Return outward (c) Return to seller (d) Return inward &
Return to seller both
38.Accounting principles are generally based on:
(a) Theory (b) Practicability (c) Subjectivity (d) None of these
39.The person to whom the goods are sold on credit is called:
(a) Seller (b) Buyer (c) Debtor (d) Creditor
40.Business debts are known as:
(a) Liabilities (b) Assets (c) Expenses (d) Owner’s Equity
41.Any activity undertaken for the purpose of earning profit is called:
(a) Dealing (b) Performance (c) Business (d) Duties
42.Any physical thing that has money value is called as
(a) Transaction (b) Intangible asset (c) Asset (d) Goodwill
43.Stationary is classified into
(a) Factory supplies (b) Office supplies (c) Sales Supplies (d) Trade Supplies
Lahore Board – 2009
1. To record, classify and summarize business transaction is called:
(a) Cost Accounting (b) Financial Accounting (c) Book keeping (d) Accounting
2. The party most interested in accounting information is:
(a) Owner (b) Manager (c) Investors (d) Creditors
3. The book in which business transactions are recorded on daily basis is called:
(a) Ledger (b) Account (c) Journal (d) Summery

Chapter – 2: Accounting Equation

Lahore Board – 2004

1. The systems of book keeping are:
(a) Two (b) Three (c) Four (d) Five
Lahore Board – 2005
2. If the assets of the business are Rs. 10,000, Capital is Rs. 7000 and the liabilities
will be:
(a) 17000 (b) 3000 (c) Both of these (d) None of these
Lahore Board – 2006
3. Three basic elements of accounting equations are:
(a) Assets (b) Capital (c) Liabilities (d) All of these
Lahore Board – 2007
4. In accounting equation assets are equal to:
(a) Capital (b) Capital + Liabilities (c) Liabilities (d) Capital – Liabilities
Lahore Board – 2008
5. Modern system of book keeping is:
(a) Single entry system (b) Modern system (c) Double entry system (d) None
of these

Chapter – 3: Nature of Transactions & Rules of Debit and Credit

Lahore Board – 2004
1. Entry for depreciation is debited to depreciation account and credited to which
account:
(a) Depreciation A/c (b) Asset A/c (c) Expense A/c (d) None of these
2. The sale return from customers should be debited to:
(a) Customer (b) Sale return (c) Purchases return (d) Merchandise return
Lahore Board – 2005
3. Cash account show:
(a) Debit balance (b) Credit balance (c) Both of these (d) None of these
4. Assets normally Show:
(a) Debit balance (b) Credit Balance (c) No balance (d) None of these
5. Cash A/c is a kind of :
(a) Personal A/c (b) Real A/c (c) Nominal A/c (d) None of these
6. Income tax paid by the proprietor is:
(a) Expense (b) Drawing (c) Asset (d) Liability
7. Interest on Drawing in a business is a:
(a) Income (b) Assets (c) Expense (d) Liability
Lahore Board – 2006
8. Discount received is a:
(a) Asset (b) Revenue (c) Liability (d) Expenses
9. Any amount taken out as drawing will reduce the:
(a) Purchases (b) Capital (c) Revenue (d) Expenses
10.Firm’s view Bank A/c as:
(a) Liability (b) Loan (c) Asset (d) Expense
11. Capital account is related to:
(a) Nominal A/c (b) Real A/c (c) Personal A/c (d) None of these
Lahore Board – 2007
12.Nominal accounts are related to:
(a) Assets (b) Liabilities (c) Creditors (d) Expenses + Incomes
13.Which of these accounts are increased by credit entries:
(a) Machinery A/c (b) Sales A/c (c) Rent A/c (d) Purchases A/c
 14.Which of the following accounts are increased by debit entries:
(a) Capital A/c (b) Sales A/c (c) Building A/c (d) Purchases Return A/c
15.Goods returned by a customer should be debited to:
(a) Sales A/c (b) Purchases A/c (c) Customer A/c (d) Sales return A/c
16.Discount received is:
(a) An asset (b) A revenue (b) A liability (c) An expense
17.Which of the following account is increased by debit entries:
(a) Capital A/c (b) Sales A/c (c) Building A/c (d) Purchases return A/c
18. Goods returned by customer should be debited to:
(a) Sales A/c (b) Purchases A/c (c) Customer A/c (d) Sales return A/c

19. The amount of salaries paid to Javed should be credited to:

(a) Javed A/c (b) Salaries A/c (c) Cash A/c (d) None of these
20. Which of these account increased by credit entries:
(a) Machinery A/c (b) Sales A/c (c) Rent A/c (d) Purchases A/c
21. Goods returned to supplier should be credited to:
(a) Supplier A/c (b) Sales return A/c (c) Purchases return A/c (d) Purchases A/c
22. Nominal accounts are related to:
(a) Assets (b) Liabilities (c) Creditors (d) Expenses + Incomes
23.Discount received is a:
(a) Asset (b) Liability (c) Revenue (d) Expense
24. Discount allowed is an:
(a) Asset (b) Liability (c) Revenue (d) Expense
25.Prepaid expenses are:
(a) Expense (b) Asset (c) Liability (d) None of these
Lahore Board – 2008
26.The purchase of machinery on account would
(a) Increase an asset and decrease another asset
(b) Increase an asset and decrease liability
(c) Increase an asset and increase capital
(d) Increase an asset and increase a liability

Chapter – 4: Journal – The book of first entry/original entry

Lahore Board – 2004

1. Written explanation below each entry is called:
(a) Entry (b) Narration (c) Double entry (d) None of these
Lahore Board – 2005
2. Written explanation below each entry is called:
(a) Entry (b) Narration (c) Double entry (d) None of these
 3. The journal folio is recorded in:
(a) Journal (b) ledger (c) Trail balance (c) Balance sheet
4. The Ledger folio is recorded in:
(a) Journal (b) Ledger (c) Trail balance (c) Balance sheet
Lahore Board – 2006
5. A Folio is a:
(a) Page (b) Chapter (c) Register (d) Paragraph mark
Lahore Board – 2007
1. If more than two accounts are involved in a journal entry it is called:
(a) Double entry (b) Compound entry (c) Contra entry (d) Single entry
2. Which of these is called book of original entry:
(a) Cash book (b) Ledger (c) Journal (d) Sales book

Lahore Board – 2008

3. Journal is prepared in:
(a) Columnar Form (b) Vertical form (c) Horizontal form (d) Raw form
4. Compound entry effects at least:
(a) Two accounts (b) Three accounts (c) One account (d) Four account
5. The process of recording business transaction in journal is called:
(a) Posting (b) Journalizing (c) Classifying (d) Entry
6. If more than two accounts are involved in one transaction, the journal entry is
called:
(a) Simple entry (b) Compound entry (c) Skelton entry (d) Double entry
7. Goods returned to supplier should be credited to:
(a) Supplier A/c (b) Sales Return A/c (c) Purchases return A/c (d) Purchases
A/c
Chapter – 5: Ledger – The book of 2nd entry (King of all books of accounts)

Lahore Board – 2004

1. The difference b/w the total of two sides of an account is called:
(a) Total (b) balance (c) Profit (d) Loss
2. The left hand side of an account is called:
(a) Debit side (b) Credit side (c) Upper side (d) Lower side
3. The process of recording from journal to ledger is called:
(a) Journalizing (b) Posting (c) Recording (d) None of these
4. The journal Folio is recorded in:
(a) Ledger (b) Journal (c) Trial Balance (d) none of these
5. The right hand side of an account is called:
(a) Debit side (b) Credit side (c) Upper side (d) Lower side
6. Excess of Credit side over debit side is called:
(a) Debit balance (b) Credit balance (c) No balance (d) Zero balance
Lahore Board – 2005
7. The process of equalizing two sides of an account is called as:
(a) Balancing (b) Posting (c) Journalizing (d) None of these
8. Excess of debit over credit balance is called as:
(a) Debit balance (b) Credit balance (c) No balance (d) Zero balance
Lahore Board – 2006
9. Debit denotes:
(a) Left side of an account (b) Right side of an account (c) Both (d) None of these
10.A folio is:
(a) Page (b) Chapter (c) Register (d) Paragraph mark
11.The king of all book of accounts is:
(a) Journal (b) Ledger (c) Trial balance (d) None of these
12.Posting means: a process of recording in:
(a) Journal (b) Ledger (c) Trial Balance (d) Final A/c
Lahore Board – 2008
13.Major types of ledger are:
(a) General ledger (b) Creditors ledger (c) Proprietor ledger (d) General
ledger and creditor ledger both

Chapter – 6: Trial Balance (Summarizing the accounts)

Lahore Board – 2004

1. Which of the following type of error cannot be revealed by Trial balance:
(a) An error of omission
(b) An error of Commission
(c) Compensating error
(d) Error of principles
Lahore Board – 2005
2. Cash account shows:
(a) Debit balance (b) Credit balance (c) No balance (d) Zero balance
Lahore Board – 2006
3. Liabilities normally shows:
(a) Debit balance (b) Credit balance (c) No balance (d) Zero balance
4. Trial balance helps to detect:
(a) Fraud (b) Arithmetical accuracy of Books of accounts (c) Wrong entry (d)
None of these
Lahore Board – 2007
5. Trial balance is prepared to detect:
(a) Errors of omission (b) Errors of Commission (c) Compensating errors (d) Errors
of Principles
Lahore Board – 2008
6. Trial balance shows:
(a) Complete accuracy (b) Whole accuracy (c) Arithmetical accuracy (d) Full
accuracy

Chapter – 7: Banking Transaction (Journal + Ledger + Trial Balance)

Lahore Board – 2004

1. Which type of cheque a holder can encashed at the bank counter:
(a) Bearer cheque (b) Order cheque (c) Cross cheque (d) None of these
Lahore Board – 2005
2. Name of the cheque which cannot be encashed at the bank counter:
(a) Cross cheque (b) Bearer cheque (c) Order cheque (d) None of these
Lahore Board – 2007
3. The cheque which is returned by bank unpaid is called:
(a) Cross cheque (b) Bearer cheque (c) Dishonored cheque (d) Order cheque
(b)
Chapter – 8: Final Account

Lahore Board – 2004

1. Closing stock is recorded in:
(a) Balance sheet (b) Trading A/c (c) Trading A/c and Balance sheet (d) None of
these
2. Bad debts amount is credited to:
(a) Creditor’s A/c (b) Bad – debts A/c (c) Sales A/c (d) Purchases A/c
3. Net profit is transferred to:
(a) Capital A/c (b) Asset side of balance sheet (c) Liability side of Balance sheet
(d) None of these
4. Machinery is:
(a) Current Asset (b) Liquid Asset (c) Fixed Asset (d) None of these
5. Bad debts is debited to:
(a) Trading A/c (b) Profit and Loss A/c (c) Balance sheet (d) None of these
6. Which of these is written as a foot note below balance sheet:
(a) Contingent liabilities (b) Current liabilities (c) External Liabilities (d) None of
these
7. Cash is an:
(a) Liability (b) Asset (c) Income (d) Expense
8. Balance sheet is a statement of:
(a) Assets (b) Liabilities (c) Assets and Liabilities (d) None of these
9. Expenses relating to sale of goods are shown in:
(a) Profit and Loss A/c (b) Trading A/c (c) Balance sheet (d) None of these
 10.Bad debts amount is credited in:
(a) Creditor’s A/c (b) Sales A/c (c) Debtor’s A/c (d) Purchases A/c
11.Income tax paid by proprietor is :
(a) Expense (b) Drawing of proprietor (c) Asset (d) Liability
12.Gross profit is:
(a) Debited to Profit and Loss A/c (b) Credited to Profit and Loss A/c (c) Both of
these (d) None of these
13.Cash is a:
(a) Fixed asset (b) Current asset (c) Liquid current asset (d) None of these
14.Unearned interest means:
(a) Interest received but not earned
(b) Interest earned but not received
(c) Interest earned and received
(d) Interest not received not earned
15.Accrued interest means:
(a) Interest received but not earned
(b) Interest earned but not received
(c) Interest earned and received
(d) Interest not received not earned
Lahore Board – 2005
16.Assets having no market value are called:
(a) Wasting Assets (b) Real Assets (c) Fictitious Assets (d) Contingent Assets
17.Wages outstanding should appear on which side of Balance sheet:
(a) Asset side (b) Liability side (c) Both of these (d) None of these
18.Which of these shows the financial position of a concern on a particular date:
(a) Trading A/c (b) Profit and Loss (c) Balance sheet (d) None of these
19.Wages should be shown in:
(a) Debit side of profit and Loss A/c
(b) Credit side of Profit and Loss A/c
(c) Debit side of Trading A/c
(d) Credit side of Trading A/c
20.Account payable is:
(a) Liability (b) Asset (c) Expense (d) Income
21.All the direct expenses are charged to:
(a) Trading A/c (b) Profit and Loss A/c (c) Balance sheet (d) None of these
22.Interest on drawing for a business is:
(a) Income (b) Expense (c) Asset (d) Liability
23.Bad debts recorded is debited to:
(a) Debtor’s A/c (b) Bad debts A/c (c) Cash A/c (d) Bad debts recovered A/c
24.Plant is a:
(a) Current asset (b) Fixed Asset (c) Current liability (d) None of these
 25.Expenses paid in advance are:
(a) Assets (b) Liability (c) Expenses (d) Incomes
26.The gradual decrease in the value of an asset is called as:
(a) Appreciation (b) Depreciation (c) Amortization (d) None of these
Lahore Board – 2006
27.Expenses Directly connected to the purchases of goods:
(a) Direct expenses (b) Indirect Expenses (c) Administrative Expenses (d) None
of these
28.Balance sheet is a statement of:
(a) Assets (b) Liabilities (c) Both (d) None of these
29.Which of these is also called statement of Financial Position:
(a) Trading A/c (b) Profit and Loss A/c (c) Balance sheet (d) None of these
30.The inability to pay one’s debt is called:
(a) Solvency (b) Insolvency (c) Both of these (d) None of these
31.The credit Balance of Trading A/c is:
(a) Gross profit (b) Gross Loss (c) Net profit (d) Net loss
32.Discount received is :
(a) An Asset (b) A revenue (c) A liability (d) An expense
33.Goodwill is an example of:
(a) Current Asset (b) Fixed Asset (c) Liquid asset (d) Intangible fixed asset
34.Trading Account shows………………of the business:
(a) Gross result (b) Net result (c) Gross profit / Gross Loss (d) Both ‘a’ and ‘c’
35.The debit balance of Trading A/c is called:
(a) Gross profit (b) Gross Loss (c) Net profit (d) Net Loss
Lahore Board – 2007
36.Which of these is a fixed asset:
(a) Cash (b) Stock (c) Plant (d) Prepaid Expenses
37.Bad debts are shown in the:
(a) Trading A/c (b) Profit and Loss A/c (c) None of these (d) Both first
38.Carriage paid on goods purchased is a:
(a) Direct expense (b) Indirect expenses (c) Operating expense (d) General
Expenses
39.Unearned income is shown as:
(a) Assets (b) Liabilities (c) Expenses (d) Income
40.Balance sheet is a statement of:
(a) Assets (b) Liabilities (c) Both first (d) None of these
41.Which of these assets is an intangible asset:
(a) Building (b) Furniture (c) Cash (d) Goodwill
42.To any business, bad debts is:
(a) An asset (b) A Loss (c) An income (d) Liability
 43.Prepaid expenses are:
(a) Expense (b) Asset (c) Liability (d) None of these
Lahore Board – 2008
44.Furniture and Machinery Represent:
(a) Fixed assets (b) Current Assets (c) Fictitious Assets (d) Intangible Assets
45.Bill receivable and debtors are:
(a) Long term assets (b) Fixed assets (c) Fictitious assets (d) Current assets
46.Operating expenses represents:
(a) Gross profit – Operative Exp (b) Selling + General Exp (c) Selling +
Administrative Exp (d) All of these
47.Net loss is transferred in balance sheet to:
(a) Capital (b) Assets (c) Losses (d) Deferred Losses
48.Assets which comes into existence upon the happing of a certain event are called:
(a) Fictitious assets (b) Contingent assets (c) Floating assets (d) Dependent assets
49.Carriage paid on goods sold is a:
(a) Direct expenses (b) General expenses (c) Operating expenses (d) Selling
expenses
50.Expenses paid in advance are called:
(a) Prepaid expenses (b) Expired expenses (c) Deferred expenses (d) Both prepaid
and Expired expenses
51.Bad debts arises from:
(a) Sale on account (b) Cash sales (c) Account receivable (d) Account payable
52.Any physical thing that has money value is called:
(a) Transaction (b) Intangible asset (c) Asset (d) Goodwill
53.Stationary is classified into:
(a) Factory supplies (b) Office supplies (c) Sales supplies (d) Trade supplies
Chapter – 9: Capital And Revenue Expenditure

Lahore Board – 2004

1. Building destroyed by fire is:
(a) Capital expenditure (b) Revenue expenditure (c) Capital loss (d) Revenue loss
2. Repairs of Machinery is:
(a) Capital expenditure (b) Revenue expenditure (c) Capital loss (d) Revenue loss
3. Preliminary expenses incurred for the formation of company is:
(a) Capital expenditure (b) Revenue expenditure (c) Capital loss (d) Revenue loss
4. Cost of issue of shares are:
(a) Capital expenditure (b) Revenue expenditure (c) Capital loss (d) Revenue loss
5. Salaries paid to staff are:
(a) Capital expenditure (b) Revenue expenditure (c) Capital loss (d) Revenue loss
6. Heavy advertisement expenditures are:
(a) Capital expenditure (b) Revenue expenditure (c) Capital loss (d) Revenue loss
 7. Goods and Raw material purchased is:
(a) Capital Expenditure (b) Revenue Expenditure (c) Capital Receipt (d) Revenue
Receipt
8. Amount received from sale of stock is:
(a) Revenue receipts (b) Capital Receipts (c) Capital Profit (d) Revenue Profit
9. Wages paid for the construction of building is:
(a) Capital Expenditure (b) Revenue Expenditure (c) Deferred revenue expenditure
(d) None of these
Lahore Board – 2005
10.Receipts from the sale of goods is called:
(a) Capital Receipts (b) Revenue Receipts (c) Capital Profit (d) Revenue profit
11.Loss of cash stolen by theft is a:
(a) Capital loss (b) Revenue loss (c) Capital expenditure (d) Revenue expenditure.
Lahore Board – 2006
12.Capital contributed by partner is:
(a) Capital expenditure (b) Revenue expenditure (c) Capital receipts (d) Revenue
Receipts
13.Which of these expenditure do not incurred again and again:
(a) Capital expenditure (b) Revenue expenditure (c) Capital receipts (d) Revenue
Receipts
14.Profit which is earned on sale of fixed asset is called:
(a) Capital profit (b) Revenue Profit (c) Capital Receipt (d) Revenue Receipt
15.Which of these expense reduces the profit of the business:
(a) Capital expenditure (b) Revenue Expenditure (c) Both of these (d) None of
these
Lahore Board – 2007
16.Freight paid on Machinery purchased is a:
(a) Revenue expenditure (b) Capital Loss (c) Capital expenditure (d) Revenue
Loss
17.Carriage paid on purchase of Furniture is a:
(a) Revenue expenditure (b) Revenue Loss (c) Capital Expenditure (d) Capital
loss
Lahore Board – 2008
18.Preliminary expenses incurred in formation of joint stock company represents:
(a) Capital Loss (b) Revenue loss (c) Capital Exp (d) Deferred Revenue Exp
19.Legal expenses incurred in purchasing land property represents:
(a) Capital expenditures (b) Revenue Expenditures (c) Revenue Loss (d) Deferred
Revenue expenditures
20.A payment for freight on raw material purchased is called:
(a) Capital payment (b) Revenue payment (c) Deferred revenue payment (d) None
of these
 Chapter -10: Rectification of Errors

Lahore Board – 2004

1. The transaction which are omitted from the record are called:
(a) Error of omission (b) Error of Commission (c) Error of Principles (d) None of
these
2. Wrong allocation of expenses b/w capital and revenue expenditure is a:
(a) Error of commission (b) Error of Principle (c) Compensating error (d) Error of
Omission
3. Inadequate provision for depreciation is:
(a) Error of Principle (b) Error of Commission (c) Error of Omission (d)
Compensating error
4. Error of commission consist of:
(a) Wrong entry (b) Wrong posting (c) Error of Omission (d) Compensating
error
Lahore Board – 2006
5. Wrong addition is:
(a) Error of Omission (b) Error of Commission (c) Error of Principles (d) None of
these
6. When transaction is recorded incorrectly, it is an error of:
(a) Error of commission (b) Error of Omission (c) book keeping error (d) error of
principles
7. If purchase book overcastted, it will:
(a) Increase income (b) Decrease income (c) Not effect income (d) None of these
8. If sales book Undercasted , it will:
(a) Increase income (b) Decrease income (c) Not effect income (d) None of these
9. Wrong postings are error of :
(a) Omission (b) Commission (c) Principles (d) None of these
Lahore Board – 2007
10.The errors which cancel themselves out are called:
(a) Errors of Omission (b) Errors of Commission (c) Compensating Errors (d)
None of these
Lahore Board – 2008
11.Errors which effect income statement belongs to:
(a) Real A/c (b) Nominal A/c (c) Personal A/c (d) None of these
12.The transaction which is omitted from record is called:
(a) Error of omission (b) Error of Commission (c) Error of principle (d)
Compensating error
 Chapter -11: Cash Book

Lahore Board – 2004

1. Balance of petty cash book is:
(a) Asset (b) Liability (c) Income (d) expense
Lahore Board – 2005
2. Cash book is maintained by:
(a) Customer’s Accountant (b) Banker (c) Auditor (d) None of these
3. Cash book’s credit balance indicate:
(a) Asset (b) Overdraft (c) Favorable balance (d) None of these
Lahore Board – 2006
4. Cash purchases are recorded in:
(a) Purchase journal (b) Cash book (c) Journal (d) None of these
5. Month end balance is also called:
(a) Opening balance (b) Closing balance (c) No balance (d) None of these
6. Which one of these types of discount is recorded in cash book:
(a) Trade discount (b) Cash discount (c) Quantity discount (d) All of these
Lahore Board – 2007
7. Cash sales are recorded in:
(a) Sales book (b) Cash book (c) Purchases book (d) Pass book
8. The book meant for recording all cash transactions is called:
(a) Purchases book (b) Sales book (c) Cash book (d) Pass book
9. The entry which is recorded on the both sides of three column cash book is
called:
(a) Single entry (b) Double entry (c) Compound entry (d) Contra entry
Lahore Board – 2008
10.Cash purchases are recorded in large organization in:
(a) Purchases day book (b) Purchases journal (c) General journal (d) cash book
11.Petty cash book is a branch of:
(a) Pass book (b) Cash book (c) Journal (d) Ledger
12.The book in which small payments like refreshment, tissues etc., are recorded is
called:
(a) Main cash book (b) Petty cash book (c) Cash account (d) Both main cash book
and Petty cash book
13.Cheque received but not deposited recorded in cash book in:
(a) Cash column (b) Bank column (c) Discount column (d) None of these
 Chapter – 12: Bank Reconciliation Statement

Lahore Board – 2004

1. Bank reconciliation statement is prepared by:
(a) Banker (b) Auditor (c) Customer’s Accountant (d) None of these
2. Favorable balance of pass book means:
(a) Debit balance (b) pass book (c) No balance (d) None of these
Lahore Board – 2005
3. Pass book is maintained by:
(a) Banker (b) Auditor (c) Customer’s Accountant (d) None of these
4. Pass book is also known as:
(a) Bank reconciliation statement (b) Cash book (c) Bank statement (d) None of
these
5. Bank reconciliation is a:
(a) Journal (b) Ledger (c) Cash book (d) Statement
6. Favorable balance of cash book means:
(a) Debit balance (b) Credit balance (c) No balance (d) Negative balance
7. Unfavorable balance of pass book means:
(a) Debit balance (b) Credit balance (c) No balance (d) None of these
Lahore Board – 2006
8. If purchases book overcastted, what will be its effect on Net profit:
(a) It will increase net profit (b) It will decease net profit (c) both of these (d)
None of these
Lahore Board – 2007
9. Bank reconciliation statement is prepared by:
(a) Bank (b) Auditor (c) Creditors (d) Accountant
10.Favorable bank balance means:
(a) Credit balance of cash book
(b) Debit balance of Cash book
(c) Debit balance of pass book
(d) None of these
Lahore Board – 2008
11.Bank reconciliation represents:
(a) Ledger (b) Journal (c) Statement (d) Both ledger and Statement
12.Credit balance of cash book is also called:
(a) Un – favorable balance (b) Favorable balance (c) Negative balance (d) Both un-
favorable and Favorable bal
13.Pass book is prepared in the book of:
(a) Bank (b) Customer (c) Guarantor (d) None of these
 Chapter –13: Special Journals

Lahore Board – 2004

1. Which of these book denotes debit note:
(a) Purchases return book (b) Sales return book (c) Cash book (d) None of these
2. Which of these book denotes credit note:
(a) Purchases return book (b) Sales return book (c) Cash book (d) None of these
Lahore Board – 2006
3. Credit sale of goods are recorded in:
(a) Cash book (b) Sales book (c) sales return book (d) None of these
Lahore Board – 2007
4. Credit sales are recorded in:
(a) Cash book (b) Sales book (c) Purchases book (d) Pass book
(b)
Chapter – 14: bill of exchange

Lahore Board – 2004

1. A bill of exchange is drawn by:
(a) Debtor (b) Creditor (c) Holder (d) None of these

2. A bill of exchange is:

(a) Conditional order (b) Unconditional order (c) Promise (d) None of these
3. There are …………….parties in a bill of exchange:
(a) Two (b) Three (c) Four (d) Five
4. The person to whom bill of exchange is drawn is known as:
(a) Drawer (b) Drawee (c) Payee (d) None of these
5. Refusal of payment of bill is known as:
(a) Honoured (b) Dishonoured (c) Retiring (d) Accommodation
6. Payment of bill before maturity is called:
(a) Renewal (b) Dishonoured (c) Retiring (d) Accommodation
Lahore Board – 2005
7. The rebate in case of retiring a bill, is a revenue for:
(a) Drawer (b) Drawee (c) Holder (d) None of these
8. A bill which is not inland bill is a:
(a) Accommodation bill (b) Foreign bill (c) Both of these (d) None of these
9. The person to whom the bill is transferred is called:
(a) Drawee (b) Drawer (c) Endorser (d) Endorsee
10.A bill of exchange is accepted by:
(a) Creditor (b) Debtor (c) Holder (d) None of these
11.The person who receives the amount of bill is called:
 (a) Drawer (b) Drawee (c) Payee (d) None of these

12.Bill paid before due date is called:

(a) Renewal of bill (b) Acceptance of bill (c) Accommodation of bill (d) Retiring
a bill
Lahore Board – 2006
13.A person on whom the bill is drawn:
(a) Drawer (b) Drawee (c) Both (d) None of these
14.Noting charges are paid when bill is:
(a) Met (b) Discounted (c) Dishonored (d) None of these
15.Number of parties involved in bill of exchange are:
(a) Two (b) Three (c) Four (d) Five
16.Which of these cannot be discounted?
(a) Bill of exchange (b) Promissory note (c) Both of these (d) None of these
17.Negotiable instrument includes:
(a) Cheque (b) Promissory note (c) Bill of exchange (d) All of these
18.Promissory note is a written promise of:
(a) Debtor (b) Creditor (c) Bank (d) Agent
19.A promissory note is not a written:
(a) Promise by maker (b) Order by maker (c) Request by maker (d) None of these
20.New bill for extended period is called:
(a) Retiring bill (b) Accommodation bill (c) Renewal bill (d) None of these
Lahore Board – 2007
21.A bill of exchange is accepted by:
(a) Drawer (b) Drawee (c) Payee (d) Bank
22.Noting charges are paid when bill is:
(a) Honored (b) Dishonored (c) Discounted (d) None of these
23.For payment of bill of exchange, grace days are:
(a) 2 days (b) Three days (c) 4 days (d) 5 days
24.The person who draws a bill of exchange is known as:
(a) Drawer (b) Drawee (c) Payee (d) Bank
Lahore Board – 2008
25.A bill of exchange is drawn by:
(a) Debtor (b) Creditor (c) Holder (d) None of these
26.A bill of exchange is accepted by:
(a) Debtor (b) Creditor (c) Holder (d) Seller