CBSE Class 11 Chapter 2 Basic Accounting Terms - One Mark
Basic Accounting Terms
Introduction:
Learn the important MCQ questions for Class 11 Accountancy Chapter 2 of Basic Accounting Terms with the latest CBSE syllabus.
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Multiple Choice Questions:
I.
Select the correct alternative:
1) Capital is ____________
a) Internal Liability
b) External Liability
c) Internal as well as External liability
d) None of these
Ans: a) Internal Liability
2) Goods taken by the proprietor for personal use
is__________
a) Sale
b) Drawings
c) Purchase
d) None of these
Ans: b) Drawings
3) Amount received or receivable against sale of
goods is ______
a) Revenue Receipt
b) Capital Receipt
c) Sometimes revenue receipt and sometimes capital
receipt
d) None of the above
Ans: a) Revenue Receipt
4) Amount paid or payable against purchase of goods is _______
a) Revenue Expenditure
b) Capital Expenditure
c) Both (a) and (b)
d) None of these
Ans: a) Revenue Expenditure
5) Goodwill is a/an _________
a) Tangible Asset.
b) Intangible Asset.
c) Current Asset.
d) Fictitious Asset.
Ans: b) Intangible Asset.
6) Expenditure of revenue nature that gives benefit
for more than one accounting period is categorized as ___________
a) Deferred Revenue Expenditure.
b) Capital Expenditure.
c) Revenue Expenditure.
d) None of these.
Ans: a) Deferred Revenue Expenditure.
7) A person who owes money to a firm against goods sold is called a ________.
a) Creditor
b) Debtor
c) Both (a) and (b)
d) None of these.
Ans: b) Debtor
8) A person to whom money is owed by a firm for the purchase of goods is called a _______.
a) Creditor
b) Debtor
c) Both (a) and (b)
d) None of these.
Ans: a) Creditor
9) "Purchase" refers to the purchase of _______
a) Goods for resale.
b) Stationery for office use.
c) Assets for the factory.
d) None of the above.
Ans: a) Goods for resale.
10) A liability arises because of _______
a) Cash Transactions.
b) Credit Transactions.
c) Cash as well as Credit Transactions.
d) None of these.
Ans: b) Credit Transactions.
11) The amount invested by the proprietor
in a business is called _______
a) Capital.
b) Cash.
c) Revenues.
d) Loan.
Ans: a) Capital.
12) Stock is valued at _______
a) Cost or Net Realisable Value (Market
Value), whichever is lower.
b) Cost or Net Realisable Value (Market
Value), whichever is higher.
c) Cost.
d) Net Realisable Value (Market Value).
Ans: a) Cost or Net Realisable Value (Market Value), whichever is lower.
13) Bank Overdraft is _______
a) Short-term liability.
b) Long-term liability.
c) Contingent liability.
d) None of these.
Ans: a) Short-term liability.
14) Which of the following terms increases
capital?
a) Drawings.
b) Expenses.
c) Loss.
d) Profit.
Ans: d) Profit.
15) Which of the following is not a fixed
asset?
a) Building.
b) Plant and Machinery.
c) Balance with bank.
d) Goodwill.
Ans: c) Balance with bank.
16) Which of the following is not a
long-term liability?
a) Creditors.
b) Term loan.
c) Debentures.
d) Capital.
Ans: a) Creditors.
17) Which of the following are goods?
a) Machines manufactured for sale.
b) Furniture purchased for sale.
c) Books and stationery purchased by a
book seller.
d) All of the above.
Ans: d) All of the above.
18) Which of the following is an asset?
a) Machinery
b) Purchases
c) Sales Return
d) Interest Received
Ans: a) Machinery
19) Which of the following is a liability?
a) Furniture
b) Rent Payable
c) Interest Received
d) Stock
Ans: b) Rent Payable
20) Which of the following is revenue?
a) Purchases
b) Purchase Returns
c) Sales
d) Salary Payable
Ans: c) Sales
21) Which of the following is not an expense?
a) Furniture
b) Salary
c) Rent
d) Electricity Expenses
Ans: a) Furniture
22) Which of the following is a business
transaction?
a) Goods purchased on credit.
b) An employee being dismissed.
c) Proprietor purchasing a car for their own use.
d) Sale of personal assets by the proprietor.
Ans: a) Goods purchased on credit.
23) The nature of capital is _______.
a) an asset.
b) a liability.
c) an income.
d) an expense.
Ans: b) a liability.
24) Sale is recognised as revenue
a) when the contract for sale is entered into.
b) at the point of sale or performance of service.
c) after the expiry of credit period allowed to
debtors.
d) after the money collected from the customers.
Ans: b) at the point of sale or performance of service.
25) The nature of accrued income is __________.
a) revenue.
b) liability.
c) expenses.
d) asset.
Ans: d) asset.
26) Trade Discount allowed _________
a) is shown separately in the books of account.
b) is not shown separately in the books of account.
c) can be shown either separately or deducted from the purchase cost.
d) None of the above.
Ans: b) is not shown separately in the books of account.
27) Which of the following transactions is not of
financial character?
a) Purchase of asset on credit
b) Purchase of asset for cash
c) Withdrawing of money by proprietor from business
d) Strike by employees.
Ans: d) Strike by employees.
28) "Purchase" refers to the buying of ______.
a) Stationery for office use.
b) Assets for the factory.
c) Goods for resale.
d) Investment.
Ans: c) Goods for resale.
29) "Goods" means __________
a) Items purchased for own consumption.
b) Items purchased for donation.
c) Items purchased for resale.
d) Items purchased for use in business.
Ans: c) Items purchased for resale.
30) Out of the following assets, which one is not an
intangible asset?
a) Investment
b) Patents
c) Goodwill
d) Trade Mark
Ans: a) Investment
II. Determine if the following are assets, liabilities, capital, revenue from operations, revenues, expenses, or none:
(a) Machinery
Ans: Asset
(b) Purchases
Ans: Expense
(c) Stock
(d) Creditors
Ans: Liability
(e) Capital
Ans: Capital
(f) Salary paid to a clerk
Ans: Expense
(g) Sales
(h) Furniture
Ans: Asset
(i) Interest received
Ans: Revenue
(j) Rent paid
Ans: Expense
Objective
Type Questions:
I.
State whether the following statements are true or false:
(1) Goodwill is a tangible asset.
Ans: False
(2) A person who owes money to the firm against goods sold is a debtor.
Ans: True
(3) A person to whom money is owed by a firm for the purchase of goods is a creditor.
Ans: True
(4) Stock is valued at cost or net realizable value (market value), whichever is higher.
Ans: False
(5) Machinery used in production is not a fixed
asset.
Ans: False
(6) Rent payable is a liability.
Ans: True
(7) Purchases is revenue.
Ans: False
(8) Trade discount is recorded in the books.
Ans: False
(9) Goods taken by the owner for personal use are debited to the capital account.
Ans: False
(10) 'Goods' means a physical item of trade.
Ans: True
(11) Debtors, Bills Receivables, and Bank Balances are examples of fictitious assets.
Ans: False
(12) A person who is not in a position to pay his debts is known as insolvent.
Ans: True
II.
Fill in the blanks with appropriate words:
(1) A person to whom a firm owes money for purchase
of goods is a _______.
Ans: Creditor
(2) The amount invested by the owner in the business is
termed as _________.
Ans: Capital
(3) The amount of debts ________ from the
debtors is termed as bad debts.
Ans: Irrecoverable
(4) A person who owes money to the firm for the sale of
goods is a _________.
Ans: Debtor
(5) The nature of capital is a __________.
Ans: Liability
(6) The nature of accrued income is __________.
Ans: Asset
(7) Bad debts recovered is a ________ receipt.
Ans: Revenue
(8) "Purchases" means the purchase of goods for __________.
Ans: Resale
(9) A bank overdraft is a ________ liability.
Ans: Current
(10) Amount at which an asset appears in the books
of account is ________.
Ans: Book Value
(11) Fall in the value of an asset due to its use is
termed as ___________.
Ans: Depreciation
(12) A liability arises because of __________ transactions.
Ans: Credit
Conclusion:
Carefully rewrite all the important MCQs to clarify your concepts of basic accounting terms.
Print the below MS Word practice sheet and revise and practice offline anytime.
Repeat watching the video explanation to get more clarity and to revise fast before exams.
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