Recording of Transactions - I (Class 11 Accountancy)
Practise chapter-wise MCQs for Class 11 Accountancy — Recording of Transactions - I. Every question comes with the correct answer and an explanation.
TL;DR: Practise chapter-wise MCQs for Class 11 Accountancy — Recording of Transactions - I. Every question comes with the correct answer and an explanation.
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Practise chapter-wise MCQs for Class 11 Accountancy — Recording of Transactions - I. Every question comes with the correct answer and an explanation.
Recording of Transactions - I MCQs with Answers & Explanations
Q1. Which of the following is an example of a revenue receipt?
- Income from issuing debentures.
- Loan taken from a bank.
- Rent received from a property. ✓ (correct)
- Sale of a fixed asset.
Explanation: Revenue receipts are those that are earned in the ordinary course of business and are recurring in nature. Rent received from a property is a common example.
Q2. Which of the following is NOT an objective of accounting?
- To provide information to management for decision-making.
- To ascertain the profitability of the business.
- To maintain systematic records.
- To predict future market trends with certainty. ✓ (correct)
Explanation: While accounting provides data that helps in forecasting, it cannot predict future market trends with certainty. Its primary objectives are recording, summarizing, and reporting financial information.
Q3. Goods returned by a customer are recorded in:
- Sales Return Book ✓ (correct)
- Sales Account
- Purchases Return Book
- Cash Book
Explanation: When a customer returns goods previously purchased on credit, it is recorded in the Sales Return Book (or Returns Inward Book).
Q4. A transaction where a business pays for services rendered by an outsider is an example of:
- Capital expenditure
- Revenue expenditure ✓ (correct)
- Deferred revenue expenditure
- None of the above
Explanation: Revenue expenditure is incurred for the day-to-day operations of the business and does not result in the acquisition of a long-term asset or a significant increase in earning capacity.
Q5. Which accounting book is primarily used to record transactions chronologically as they occur?
- Trial Balance
- Journal ✓ (correct)
- Balance Sheet
- Ledger
Explanation: The Journal, also known as the book of original entry, records all transactions in a chronological order.
Q6. When goods are purchased on credit, which account is debited?
- Creditors Account
- Cash Account
- Purchases Account ✓ (correct)
- Sales Account
Explanation: According to the double-entry system, when goods are purchased (whether for cash or credit), the Purchases Account is debited as it represents an increase in expenses or assets.
Q7. Which of the following is a financial transaction?
- Signing a contract for the future purchase of goods.
- A board meeting discussing future strategies.
- A customer visiting the store to inquire about products.
- Payment of salary to an employee. ✓ (correct)
Explanation: A financial transaction is an event that has a monetary value and affects the financial position of a business. Payment of salary has a direct monetary impact.
Q8. An accounting entry where only one account is affected is known as:
- Single entry ✓ (correct)
- Journal entry
- Double entry
- Compound entry
Explanation: While accounting primarily follows the double-entry system, a single entry means only one account is affected. This is not standard practice in modern accounting but conceptually, it refers to a single-sided transaction.
Q9. The process of transferring entries from the journal to the ledger is called:
- Classifying
- Posting ✓ (correct)
- Balancing
- Summarizing
Explanation: Posting is the process of transferring the debit and credit entries from the journal to their respective accounts in the ledger.
Q10. Which of the following is a capital expenditure?
- Payment of electricity bill.
- Cost of repairs to a building.
- Wages paid for installation of machinery. ✓ (correct)
- Purchase of raw materials for production.
Explanation: Capital expenditure is incurred to acquire or improve a long-term asset, thereby increasing its earning capacity or useful life. Wages paid for installation of machinery are directly related to bringing the asset into working condition.
More Class 11 Accountancy MCQs
- Accounting for Partnership: Basic Concepts
- Goodwill: Nature and Valuation
- Reconstitution of a Partnership Firm - Change in Profit Sharing Ratio
- Reconstitution of a Partnership Firm - Admission of a Partner
- Reconstitution of a Partnership Firm - Retirement and Death of a Partner
- Dissolution of Partnership Firm
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