Top 25 MCQ-Double Entry System

Test your accounting skills by practicing this easy and simple “Top 25 MCQ-Double Entry System”.

This will give you the confidence to do well in any competitive tests, such as job interviews, school and college exams, any types of accounting tests, etc.

Total MCQ:	25
Time:	10 Minutes
Pass Mark:	60 Percent

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START QUIZ

#1. Double Entry System means

Entry in the book of accounts of both parties.

Recording the same transaction towards debit and credit.

Record two accounts of two dates together.

Use of two journal and one ledger.

#2. Double Entry System is a--

Partial accounting system

Double work accounting system

Complete and Scientific accounting system

reporting system

#3. What is the basis of current accounting system?

Single Entry System

Cost Accounting System

Multiple Entry System

Double Entry System

#4. Where the transactions are recorded first in double entry system?

Ledger

Journal

Income and Expenditure Account

Trial Balance

#5. Accounts that take advantage of the double entry system are called-

Debtor

Creditor

Net Profit

Income and expenditure a/c

#6. Debits-

Decrease both Income and assets

Increase both assets and Owner's Equity

Decrease Expenses and Liabilities

Increase both Assets and Expenses

#7. What is the main principle of double entry system?

Both parties will receive benefit

Both parties will provide benefit

One party will receive benefit and other party will provide benefit

None of these

#8. The relationship among assets, liabilities and owners equity is expressed through-

Dual aspect

Profit and loss account

Accounting Equation

Ratio Analysis

#9. Which is the correct accounting equation in modern method?

A=L-OE

L=A+OE

OE=A+L

A=L+OE

#10. Under double entry system--

Total debit amount will be equal to total credit amount

Total debit amount will not be equal to total credit amount

Total debit amount will be greater than total credit amount

Total debit amount will be less than total credit amount

#11. Which of the following is correct?

Profit decreases the capital

Loss increases the capital

Sales of goods increase the capital

Purchase of goods increase the capital

#12. Accounting equation is always affected by

Ledger

Trial balance

Transaction

Event

#13. Under the double entry system the account that provide the benefit is called-

Debtor

Creditor

Net profit

Net Loss

#14. Who is called the inventor of double entry system of accounting?

Suma de Passio

Adam Smith

Luca re Pacioli

Luca de Pacioli

#15. The double entry accounting system was first introduced in which country?

China

USA

Italy

#16. Keeping accounts in double entry system--

Reduces Cost

Increases income

Accurate accounts are kept

Decreases Profit

#17. A=L+OE, here OE means

Owners Ethics

Owners Expenses

Owners Equity

Ownners Earnings

#18. What are the results of equipment sales on credit?

Asset Increase, Income Increase

Asset Decrease, Liability Increase

Asset Decrease, Liability Decrease

Asset Increase, Loss Increase

#19. Cash basis accounting means-

To maintain a cash book

All transaction will be made in cash

All transaction will be measured in cash

To record only when cash receipts and cash payments occur in the book of accounts

#20. Which of the following transactions will increase the total assets of the company by $15,000?

A car purchased on credit $15,000 .

Equipment purchased in cash $15,000.

Recovered from Paul $15,000

Invested in cash $15,000

#21. Which of the following transactions will reduce the total assets and liabilities of the company?

Computer Purchased in cash $20,000

Repaid the bank loan $20,000

Purchased of goods on credit $ 20,000

Loan received from the bank $20,000

#22. Which of the following transaction doesn't affect owner's equity?

Depreciation on assets

Paid dividend

Paid accrued expenses

Sales of goods

#23. If the total asset is $120,000, total liability is $75,000, Provable liability is $20,000, what will be the owners equity?

$45,000

$25,000

$65,000

$95,000

#24. Which is a quantitative change?

One asset increases and the other asset decreases

Changes in the value of assets, liabilities and owners equity

Assets increase, liabilities decrease

Liabilities increase, assets decrease

#25. Which of the following reduces assets and owners equity?

Purchased Machine $3,000

Sales of goods on credit $4,000

Charged 6% bad debt provision

Received loan from bank $8,000

Finish

Results

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