Bookkeeping MCQs (Chapterwise Multiple Choice Questions)

For every debit there is a ----------------------------

debit

credit

Answer & Explanation

Correct Answer: credit

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Only legal entities can be accounting entities under accounting conventions. True or False?

True

False

Answer & Explanation

Correct Answer: False

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Unexpired costs are represented in the accounts of an accounting entity as...

liabilities

revenue

assets

expenses

equity

Answer & Explanation

Correct Answer: assets

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What three sections make up the Balance Sheet?

income, liabilities and equity

revenue, liabilities and equity

revenue, expenses and equity

assets, liabilities and equity

assets, liabilities and revenue

Answer & Explanation

Correct Answer: assets, liabilities and equity

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Taking the information from the journals and recording it in the ledgers, is known in bookkeeping as ....?

reconciling

transferring

posting

journalizing

crediting

Answer & Explanation

Correct Answer: posting

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Under the accrual basis of accounting, revenues are reported in the accounting period when the

cash received

Delivery of goods or services

Answer & Explanation

Correct Answer: Delivery of goods or services

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What is money owed by a business to its suppliers shown as a liability on a company's balance sheet?

Retained Earnings

Accounts payable

Unearned Revenue

Accounts Receivable

Inventory

Answer & Explanation

Correct Answer: Accounts payable

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Invoices from vendors (suppliers) which are due in 30 days should be credited to Accounts _______.

Cash Flow

Balance Sheet

Credit

Payable

Receivable

Answer & Explanation

Correct Answer: Payable

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Purchasers of merchandise may be dissatisfied with the quality of goods purchased on account, and return the goods to the seller with an indication that payment will not be forthcoming. In such a case, the document prepared by the purchaser is called:

a debit memorandum.

a credit memorandum.

a receiving report.

an invoice.

Answer & Explanation

Correct Answer: a debit memorandum.

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Which of the following statements in relation to materiality is true? I. Materiality of item depends on their individual or collective influence on the economic decisions of users. II.Materiality of an item depends on its absolute size and nature

I only

Neither I or II

II only

Both I and II

Answer & Explanation

Correct Answer: Both I and II

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Bookkeeping Quick Quiz

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