Nature of Accounts – MCQs with Answers

When a person buys or sells goods or acts some business activities, it is said that a business transaction has occurred. We can define Business Transaction properly as, “An exchange of goods or services between persons for price is called a transaction.” After the completion of transaction, it is necessary to record this transaction in the books of accounts. All the transactions are properly recorded after analyzing. A brief record of Transaction is called an “Account”

 Nature of Accounts– MCQs with Answers 

1. The basic rule of bookkeeping, debit what comes in and credit what goes out is applicable to:
A) Personal accounts                                (B) Natural personal accounts
C) Nominal accounts                                (D) Real accounts
2. The claim of the outsiders against the assets of the business is called:
A) Loans                                                       (B) Sundry Creditors
C) Liabilities                                                (D) Capital
3. Nominal accounts are related to:
A) Assets                                                      (B) Expense, losses and income
C) Liabilities                                                 (D) Firm or business
4. The basic rule of bookkeeping debit the receiver and credit the giver:
A) Personal accounts                                 (B) Real accounts
C) Nominal accounts                                 (D) Valuation accounts
5. The rule of debit all expenses and losses and credit all gains and income is applicable to:
A) Real accounts                                          (B) Nominal accounts
C) Personal accounts                                  (D) Artificial Personal accounts
6. Personal accounts are related to:
A) Assets and liabilities                             (B) Expense, losses and income
C) Customers, creditors etc.                     (D) None of them
7. Real accounts are related to:
A) Assets                                                      (B) Expense, losses and income
C) Customers, creditors etc.                     (D) Liabilities
8. When an account represents certain person or persons then it is called:
A) Natural Personal accounts                   (B) Artificial Personal accounts
C) Real accounts                                         (D) Representative Personal accounts
9. Account relating to the persons or firms is called:
A) Personal accounts                                  (B) Real accounts
C) Nominal accounts                                 (D) All of the above
10. Accounts which keep the record of properties owned by a trader, are called:
A) Personal accounts                                 (B) Real accounts
C) Nominal accounts                                 (D) None of them
11. A debit represents an increase in:
A) An asset                                                  (B) An equity
C) Liability                                                 (D) Owner’s equity
12. The accounts, which have their existence even after the close of the year, are known as:
A) Nominal accounts                               (B) Real accounts
C) Personal accounts                              (D) Tangible accounts
13. If an account shows a debit balance, it represents:
A) Income                                                  (B) Expense
C) Liability                                                 (D) Capital
14. A credit represents by:
A) A decrease in an equity                      (B) A decrease in a liability
C) A decrease in an asset                        (D) A decrease in owner’s equity
15. Discount received is a:
A) Asset                                                     (B) Liability
C) Revenue                                              (D) Expenses
16. The entry system in which cash account and personal accounts are maintained is called:
A) Double Entry System                                           (B) Single Entry System
C) Accounting System                                               (D) None of these
17. The concept of recording dual aspect concept of business transactions is called:
A) Double Entry System Concept                          (B) Dual Recording Concept
C) Dual Aspect Concept                                           (D) None of these
18. Which normally has a credit balance:
A) Building Account                                                 (B) Purchase account
C) Real account                                                          (D) Sales account
19. How many categories of accounts are:
A) 2                                                                               (B) 3
C) 4                                                                               (D) 5
20. Real and nominal accounts are maintained under:
A) Single Entry System (B) Double Entry System
C) Triple Entry System (D) Multiple Entry System
21. Rent, Salaries and Wages paid are:
A) Real accounts (B) Personal accounts
C) Nominal accounts (D) None of these
22. Yasir’s account is an example of:
A) Real accounts (B) Personal accounts
C) Nominal accounts (D) None of these
23. Stationery account is an example of:
A) Consumable Asset (B) Loss
C) Expense (D) None of these
24. Cash and personal accounts are maintained in:
A) Double Entry System (B) Single Entry System
C) Multiple Entry System (D) None of these
25. Real and nominal accounts are maintained under:
A) Single Entry System (B) Double Entry System
C) Triple Entry System (D) Multiple Entry System

Note: To Find Answers kindly click below to check your knowledge. Below you will find 20 MCQs from Chapter : Nature of Accounts – Part-I (1 to 20 MCQs’)