Basic Accounting Procedures – Journal Entries

Q1. Journal is also called as:
A) Ledger
B) Book of original entry
C) Trial Balance
D) Balance Sheet
Answer: B) Book of original entry

Q2. Which of the following transactions will be recorded in the journal?
A) Opening balance
B) Closing stock
C) Depreciation on machinery
D) Trial balance
Answer: C) Depreciation on machinery

Q3. Which account is debited when goods are purchased for cash?
A) Purchases A/c
B) Cash A/c
C) Capital A/c
D) Sales A/c
Answer: A) Purchases A/c

Q4. What is the rule for debit and credit for real accounts?
A) Debit the giver, credit the receiver
B) Debit what comes in, credit what goes out
C) Debit expenses, credit incomes
D) None of the above
Answer: B) Debit what comes in, credit what goes out

Q5. Cash received from a debtor is recorded as:
A) Debit Debtor, Credit Cash
B) Debit Sales, Credit Debtor
C) Debit Cash, Credit Debtor
D) Debit Debtor, Credit Sales
Answer: C) Debit Cash, Credit Debtor

Q6. Which of the following is a compound journal entry?
A) Cash paid to Ram
B) Cash received from Mohan
C) Cash paid to Ram and Mohan
D) Salary paid
Answer: C) Cash paid to Ram and Mohan

Q7. Goods sold on credit to Suresh will be recorded as:
A) Debit Cash, Credit Sales
B) Debit Suresh, Credit Sales
C) Debit Sales, Credit Suresh
D) Debit Purchases, Credit Suresh
Answer: B) Debit Suresh, Credit Sales

Q8. Which entry is passed for interest received?
A) Interest A/c Dr. To Cash A/c
B) Cash A/c Dr. To Interest A/c
C) Capital A/c Dr. To Cash A/c
D) Cash A/c Dr. To Capital A/c
Answer: B) Cash A/c Dr. To Interest A/c

Q9. Entry for payment of rent will be:
A) Rent A/c Dr. To Cash A/c
B) Cash A/c Dr. To Rent A/c
C) Rent A/c Dr. To Capital A/c
D) Capital A/c Dr. To Rent A/c
Answer: A) Rent A/c Dr. To Cash A/c

Q10. If capital is introduced in the business, the journal entry is:
A) Cash A/c Dr. To Capital A/c
B) Capital A/c Dr. To Cash A/c
C) Cash A/c Dr. To Loan A/c
D) Bank A/c Dr. To Capital A/c
Answer: A) Cash A/c Dr. To Capital A/c

Q11. Which is the correct journal entry for salary paid in cash?
A) Salary A/c Dr. To Capital A/c
B) Cash A/c Dr. To Salary A/c
C) Salary A/c Dr. To Cash A/c
D) Capital A/c Dr. To Cash A/c
Answer: C) Salary A/c Dr. To Cash A/c

Q12. What type of account is “Bank”?
A) Personal
B) Real
C) Nominal
D) Both A and B
Answer: D) Both A and B

Q13. The rule “Debit all expenses and losses, credit all incomes and gains” is applicable to:
A) Real Account
B) Personal Account
C) Nominal Account
D) All Accounts
Answer: C) Nominal Account

Q14. Which account is debited when furniture is purchased for office use?
A) Furniture A/c
B) Purchase A/c
C) Cash A/c
D) Capital A/c
Answer: A) Furniture A/c

Q15. If goods worth ₹10,000 are withdrawn by the proprietor for personal use, the correct entry is:
A) Drawings A/c Dr. To Cash A/c
B) Capital A/c Dr. To Purchases A/c
C) Drawings A/c Dr. To Purchases A/c
D) Purchases A/c Dr. To Capital A/c
Answer: C) Drawings A/c Dr. To Purchases A/c

Q16. Which account is credited when rent is received in cash?
A) Rent A/c
B) Cash A/c
C) Capital A/c
D) Income A/c
Answer: A) Rent A/c

Q17. Entry for goods purchased on credit from Ram is:
A) Ram A/c Dr. To Purchases A/c
B) Purchases A/c Dr. To Ram A/c
C) Cash A/c Dr. To Ram A/c
D) Ram A/c Dr. To Cash A/c
Answer: B) Purchases A/c Dr. To Ram A/c

Q18. Rent paid by cheque is recorded as:
A) Rent A/c Dr. To Bank A/c
B) Bank A/c Dr. To Rent A/c
C) Rent A/c Dr. To Cash A/c
D) Capital A/c Dr. To Rent A/c
Answer: A) Rent A/c Dr. To Bank A/c

Q19. Which journal entry is passed when a debtor becomes insolvent and nothing is recoverable?
A) Bad Debts A/c Dr. To Debtor’s A/c
B) Debtor’s A/c Dr. To Bad Debts A/c
C) Cash A/c Dr. To Debtor’s A/c
D) None of the above
Answer: A) Bad Debts A/c Dr. To Debtor’s A/c

Q20. Journal records transactions in:
A) Chronological Order
B) Account-wise
C) Alphabetical Order
D) Date of Payment
Answer: A) Chronological Order

Q21. Which type of account is the Capital account?
A) Real
B) Nominal
C) Personal
D) None
Answer: C) Personal

Q22. Which entry is made for depreciation charged on machinery?
A) Depreciation A/c Dr. To Machinery A/c
B) Machinery A/c Dr. To Depreciation A/c
C) Cash A/c Dr. To Depreciation A/c
D) Depreciation A/c Dr. To Cash A/c
Answer: A) Depreciation A/c Dr. To Machinery A/c

Q23. Outstanding salary is:
A) Expense
B) Income
C) Asset
D) Liability
Answer: D) Liability

Q24. Cash deposited into bank:
A) Bank A/c Dr. To Cash A/c
B) Cash A/c Dr. To Bank A/c
C) Capital A/c Dr. To Bank A/c
D) Bank A/c Dr. To Capital A/c
Answer: A) Bank A/c Dr. To Cash A/c

Q25. When an expense is paid in advance, it is shown as:
A) Income
B) Liability
C) Asset
D) Capital
Answer: C) Asset

Q26. What kind of account is salary account?
A) Nominal
B) Real
C) Personal
D) Impersonal
Answer: A) Nominal

Q27. Goods worth ₹5,000 distributed as free samples should be:
A) Treated as drawings
B) Treated as advertisement expense
C) Credited to Sales
D) Debited to Purchases
Answer: B) Treated as advertisement expense

Q28. Which of the following accounts will have credit balance?
A) Capital
B) Purchases
C) Drawings
D) Rent
Answer: A) Capital

Q29. Which of these transactions affects two accounts only?
A) Credit purchase
B) Cash sales
C) Goods given as charity
D) Goods purchased on credit and paid partly
Answer: B) Cash sales

Q30. What is the journal entry for paying commission to an agent?
A) Commission A/c Dr. To Cash A/c
B) Cash A/c Dr. To Commission A/c
C) Commission A/c Dr. To Capital A/c
D) Commission A/c Dr. To Agent A/c
Answer: A) Commission A/c Dr. To Cash A/c

Q31. What is the correct entry for withdrawing cash for personal use?
A) Drawings A/c Dr. To Cash A/c
B) Capital A/c Dr. To Cash A/c
C) Cash A/c Dr. To Drawings A/c
D) Cash A/c Dr. To Capital A/c
Answer: A) Drawings A/c Dr. To Cash A/c

Q32. Entry for receiving cash from debtor with discount allowed:
A) Cash A/c Dr., Discount A/c Dr. To Debtor A/c
B) Debtor A/c Dr. To Cash A/c
C) Cash A/c Dr. To Debtor A/c
D) Debtor A/c Dr. To Discount A/c
Answer: A) Cash A/c Dr., Discount A/c Dr. To Debtor A/c

Q33. Discount allowed is:
A) Income
B) Expense
C) Liability
D) Asset
Answer: B) Expense

Q34. Entry for prepaid insurance:
A) Prepaid Insurance A/c Dr. To Insurance A/c
B) Insurance A/c Dr. To Prepaid Insurance A/c
C) Insurance A/c Dr. To Cash A/c
D) Prepaid Insurance A/c Dr. To Cash A/c
Answer: A) Prepaid Insurance A/c Dr. To Insurance A/c

Q35. Entry for goods sold on credit:
A) Customer A/c Dr. To Sales A/c
B) Sales A/c Dr. To Customer A/c
C) Cash A/c Dr. To Sales A/c
D) Sales A/c Dr. To Purchases A/c
Answer: A) Customer A/c Dr. To Sales A/c

Q36. Journal entry for goods returned by customer:
A) Sales Return A/c Dr. To Customer A/c
B) Customer A/c Dr. To Sales Return A/c
C) Sales A/c Dr. To Customer A/c
D) Purchases A/c Dr. To Sales A/c
Answer: A) Sales Return A/c Dr. To Customer A/c

Q37. Sales Return is a:
A) Real Account
B) Nominal Account
C) Personal Account
D) None
Answer: B) Nominal Account

Q38. Which of the following is not recorded in journal?
A) Purchase of fixed asset
B) Purchase return
C) Closing stock
D) Cash sales
Answer: C) Closing stock

Q39. Entry for interest on capital:
A) Interest on Capital A/c Dr. To Capital A/c
B) Capital A/c Dr. To Interest on Capital A/c
C) Interest on Capital A/c Dr. To Cash A/c
D) Cash A/c Dr. To Interest on Capital A/c
Answer: A) Interest on Capital A/c Dr. To Capital A/c

Q40. Which of the following is a personal account?
A) Outstanding Salary
B) Sales A/c
C) Machinery A/c
D) Rent A/c
Answer: A) Outstanding Salary

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