Journal Entries-100 MCQs

Bhupendra Lad October 05, 2026 0 Comments


 

100 MCQs on Journal Entries

Instructions: Choose the most appropriate answer.

Note: Unless otherwise stated, all transactions are to be recorded in the books of the business. Assume GST is ignored wherever it is not specifically mentioned.

Part A — Standard Exam Questions (1–50)

1. Started business with cash ₹1,00,000. The correct journal entry is:

A. Cash A/c Dr. ₹1,00,000 To Capital A/c ₹1,00,000
B. Capital A/c Dr. ₹1,00,000 To Cash A/c ₹1,00,000
C. Cash A/c Dr. ₹1,00,000 To Sales A/c ₹1,00,000
D. Purchases A/c Dr. ₹1,00,000 To Cash A/c ₹1,00,000

2. Goods purchased for cash ₹20,000. The correct entry is:

A. Cash A/c Dr. To Purchases A/c
B. Purchases A/c Dr. To Cash A/c
C. Goods A/c Dr. To Capital A/c
D. Purchases A/c Dr. To Sales A/c

3. Goods sold for cash ₹15,000:

A. Cash A/c Dr. To Sales A/c
B. Sales A/c Dr. To Cash A/c
C. Cash A/c Dr. To Purchases A/c
D. Debtor A/c Dr. To Sales A/c

4. Goods purchased on credit from Ram ₹25,000:

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. Purchases A/c Dr. To Cash A/c

5. Goods sold on credit to Mohan ₹18,000:

A. Sales A/c Dr. To Mohan A/c
B. Mohan A/c Dr. To Sales A/c
C. Cash A/c Dr. To Sales A/c
D. Purchases A/c Dr. To Mohan A/c

6. Cash received from debtor Ravi ₹10,000:

A. Ravi A/c Dr. To Cash A/c
B. Cash A/c Dr. To Ravi A/c
C. Sales A/c Dr. To Ravi A/c
D. Ravi A/c Dr. To Sales A/c

7. Cash paid to creditor Sohan ₹8,000:

A. Cash A/c Dr. To Sohan A/c
B. Sohan A/c Dr. To Cash A/c
C. Purchases A/c Dr. To Sohan A/c
D. Sohan A/c Dr. To Purchases A/c

8. Salary paid in cash ₹12,000:

A. Cash A/c Dr. To Salary A/c
B. Salary A/c Dr. To Cash A/c
C. Wages A/c Dr. To Cash A/c
D. Salary A/c Dr. To Capital A/c

9. Rent paid by cheque ₹10,000:

A. Bank A/c Dr. To Rent A/c
B. Rent A/c Dr. To Bank A/c
C. Rent A/c Dr. To Cash A/c
D. Bank A/c Dr. To Capital A/c

10. Furniture purchased for cash ₹30,000:

A. Purchases A/c Dr. To Cash A/c
B. Furniture A/c Dr. To Cash A/c
C. Cash A/c Dr. To Furniture A/c
D. Furniture A/c Dr. To Capital A/c

11. Machinery purchased on credit from X Ltd. ₹2,00,000:

A. Purchases A/c Dr. To X Ltd.
B. Machinery A/c Dr. To X Ltd.
C. X Ltd. Dr. To Machinery A/c
D. Machinery A/c Dr. To Cash A/c

12. Commission received in cash ₹5,000:

A. Commission A/c Dr. To Cash A/c
B. Cash A/c Dr. To Commission A/c
C. Cash A/c Dr. To Capital A/c
D. Commission A/c Dr. To Capital A/c

13. Interest received ₹3,000:

A. Interest A/c Dr. To Cash A/c
B. Cash A/c Dr. To Interest A/c
C. Interest A/c Dr. To Capital A/c
D. Bank A/c Dr. To Interest Due A/c

14. Electricity charges paid ₹4,000:

A. Electricity A/c Dr. To Cash A/c
B. Cash A/c Dr. To Electricity A/c
C. Electricity A/c Dr. To Capital A/c
D. Purchases A/c Dr. To Cash A/c

15. Goods returned to supplier Ram ₹5,000:

A. Ram A/c Dr. To Purchase Returns A/c
B. Purchase Returns A/c Dr. To Ram A/c
C. Ram A/c Dr. To Purchases A/c
D. Cash A/c Dr. To Ram A/c

16. Goods returned by customer Mohan ₹3,000:

A. Mohan A/c Dr. To Sales Returns A/c
B. Sales Returns A/c Dr. To Mohan A/c
C. Sales A/c Dr. To Mohan A/c
D. Cash A/c Dr. To Mohan A/c

17. Cash withdrawn by proprietor for personal use ₹6,000:

A. Cash A/c Dr. To Drawings A/c
B. Drawings A/c Dr. To Cash A/c
C. Capital A/c Dr. To Cash A/c
D. Purchases A/c Dr. To Cash A/c

18. Goods withdrawn by proprietor for personal use ₹4,000:

A. Drawings A/c Dr. To Purchases A/c
B. Purchases A/c Dr. To Drawings A/c
C. Capital A/c Dr. To Sales A/c
D. Drawings A/c Dr. To Sales A/c

19. Cash deposited into bank ₹20,000:

A. Cash A/c Dr. To Bank A/c
B. Bank A/c Dr. To Cash A/c
C. Capital A/c Dr. To Bank A/c
D. Bank A/c Dr. To Capital A/c

20. Cash withdrawn from bank for office use ₹15,000:

A. Cash A/c Dr. To Bank A/c
B. Bank A/c Dr. To Cash A/c
C. Drawings A/c Dr. To Bank A/c
D. Cash A/c Dr. To Drawings A/c

21. Cash withdrawn from bank for proprietor's personal use ₹10,000:

A. Cash A/c Dr. To Bank A/c
B. Drawings A/c Dr. To Bank A/c
C. Bank A/c Dr. To Drawings A/c
D. Capital A/c Dr. To Bank A/c

22. Advertisement expenses paid ₹7,000:

A. Advertisement A/c Dr. To Cash A/c
B. Cash A/c Dr. To Advertisement A/c
C. Sales A/c Dr. To Cash A/c
D. Advertisement A/c Dr. To Capital A/c

23. Insurance premium paid ₹9,000:

A. Cash A/c Dr. To Insurance A/c
B. Insurance A/c Dr. To Cash A/c
C. Insurance A/c Dr. To Capital A/c
D. Purchases A/c Dr. To Cash A/c

24. Loan taken from bank ₹5,00,000:

A. Bank A/c Dr. To Loan A/c
B. Loan 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

25. Bank loan repaid ₹50,000:

A. Bank A/c Dr. To Loan A/c
B. Loan A/c Dr. To Bank A/c
C. Capital A/c Dr. To Bank A/c
D. Interest A/c Dr. To Bank A/c

26. Interest on bank loan paid ₹8,000:

A. Loan A/c Dr. To Bank A/c
B. Interest on Loan A/c Dr. To Bank A/c
C. Bank A/c Dr. To Interest A/c
D. Capital A/c Dr. To Bank A/c

27. A cheque received from a debtor is deposited into bank immediately. The entry is:

A. Cash A/c Dr. To Debtor A/c
B. Bank A/c Dr. To Debtor A/c
C. Debtor A/c Dr. To Bank A/c
D. Bank A/c Dr. To Cash A/c

28. A debtor directly deposits ₹25,000 into the firm's bank account:

A. Cash A/c Dr. To Debtor A/c
B. Bank A/c Dr. To Debtor A/c
C. Debtor A/c Dr. To Bank A/c
D. Bank A/c Dr. To Sales A/c

29. Bank charges debited by bank ₹1,000:

A. Bank A/c Dr. To Bank Charges A/c
B. Bank Charges A/c Dr. To Bank A/c
C. Cash A/c Dr. To Bank Charges A/c
D. Bank A/c Dr. To Cash A/c

30. Interest credited by bank ₹2,000:

A. Interest A/c Dr. To Bank A/c
B. Bank A/c Dr. To Interest A/c
C. Cash A/c Dr. To Interest A/c
D. Bank A/c Dr. To Capital A/c

31. Bad debts written off against debtor ₹5,000:

A. Debtor A/c Dr. To Bad Debts A/c
B. Bad Debts A/c Dr. To Debtor A/c
C. Cash A/c Dr. To Debtor A/c
D. Sales A/c Dr. To Debtor A/c

32. Discount allowed to debtor ₹1,000 on payment of ₹9,000:

A. Cash A/c Dr. ₹9,000; Discount Allowed A/c Dr. ₹1,000; To Debtor A/c ₹10,000
B. Debtor A/c Dr. ₹10,000; To Cash ₹9,000; To Discount Allowed ₹1,000
C. Cash A/c Dr. ₹10,000; To Debtor ₹10,000
D. Debtor A/c Dr. ₹9,000; Discount Allowed A/c Dr. ₹1,000; To Cash ₹10,000

33. Discount received from creditor ₹2,000 on payment of ₹18,000:

A. Creditor A/c Dr. ₹20,000; To Cash ₹18,000; To Discount Received ₹2,000
B. Cash A/c Dr. ₹18,000; Discount Received A/c Dr. ₹2,000; To Creditor ₹20,000
C. Creditor A/c Dr. ₹18,000; To Cash ₹18,000
D. Cash A/c Dr. ₹20,000; To Creditor ₹20,000

34. Depreciation charged on machinery ₹15,000:

A. Machinery A/c Dr. To Depreciation A/c
B. Depreciation A/c Dr. To Machinery A/c
C. Depreciation A/c Dr. To Cash A/c
D. Cash A/c Dr. To Depreciation A/c

35. Salary outstanding at year-end ₹20,000:

A. Outstanding Salary A/c Dr. To Salary A/c
B. Salary A/c Dr. To Outstanding Salary A/c
C. Cash A/c Dr. To Salary A/c
D. Salary A/c Dr. To Cash A/c

36. Rent prepaid ₹6,000:

A. Prepaid Rent A/c Dr. To Rent A/c
B. Rent A/c Dr. To Prepaid Rent A/c
C. Cash A/c Dr. To Rent A/c
D. Prepaid Rent A/c Dr. To Cash A/c

37. Commission accrued but not yet received ₹4,000:

A. Commission A/c Dr. To Accrued Commission A/c
B. Accrued Commission A/c Dr. To Commission A/c
C. Cash A/c Dr. To Commission A/c
D. Commission A/c Dr. To Cash A/c

38. Interest earned but not yet received ₹3,500:

A. Interest A/c Dr. To Outstanding Interest A/c
B. Accrued Interest A/c Dr. To Interest A/c
C. Cash A/c Dr. To Interest A/c
D. Interest A/c Dr. To Cash A/c

39. Goods costing ₹8,000 distributed as free samples:

A. Advertisement A/c Dr. ₹8,000 To Purchases A/c ₹8,000
B. Purchases A/c Dr. ₹8,000 To Advertisement A/c ₹8,000
C. Sales A/c Dr. ₹8,000 To Purchases A/c ₹8,000
D. Drawings A/c Dr. ₹8,000 To Purchases A/c ₹8,000

40. Goods costing ₹10,000 donated to a charitable institution:

A. Charity A/c Dr. To Purchases A/c
B. Purchases A/c Dr. To Charity A/c
C. Advertisement A/c Dr. To Cash A/c
D. Drawings A/c Dr. To Purchases A/c

41. Goods costing ₹5,000 destroyed by fire and no insurance claim is receivable:

A. Fire Loss A/c Dr. To Purchases A/c
B. Purchases A/c Dr. To Fire Loss A/c
C. Insurance A/c Dr. To Purchases A/c
D. Cash A/c Dr. To Purchases A/c

42. Goods costing ₹20,000 destroyed by fire; insurance company admits claim of ₹15,000:

A. Fire Loss A/c Dr. ₹20,000 To Purchases A/c ₹20,000; Insurance Claim A/c Dr. ₹15,000 To Fire Loss A/c ₹15,000
B. Insurance Claim A/c Dr. ₹20,000 To Purchases A/c ₹20,000
C. Fire Loss A/c Dr. ₹15,000 To Purchases A/c ₹15,000
D. Purchases A/c Dr. ₹20,000 To Fire Loss A/c ₹20,000

43. Goods costing ₹12,000 used for office purposes:

A. Office Expenses A/c Dr. To Purchases A/c
B. Purchases A/c Dr. To Office Expenses A/c
C. Drawings A/c Dr. To Purchases A/c
D. Cash A/c Dr. To Purchases A/c

44. A proprietor introduces furniture worth ₹40,000 as capital:

A. Furniture A/c Dr. To Capital A/c
B. Capital A/c Dr. To Furniture A/c
C. Purchases A/c Dr. To Capital A/c
D. Furniture A/c Dr. To Cash A/c

45. Business receives ₹50,000 as capital through bank:

A. Capital A/c Dr. To Bank A/c
B. Bank A/c Dr. To Capital A/c
C. Cash A/c Dr. To Capital A/c
D. Capital A/c Dr. To Cash A/c

46. Wages paid for installation of machinery ₹7,000:

A. Wages A/c Dr. To Cash A/c
B. Machinery A/c Dr. To Cash A/c
C. Cash A/c Dr. To Machinery A/c
D. Purchases A/c Dr. To Cash A/c

47. Repairs to machinery paid ₹6,000:

A. Machinery A/c Dr. To Cash A/c
B. Repairs A/c Dr. To Cash A/c
C. Cash A/c Dr. To Repairs A/c
D. Purchases A/c Dr. To Cash A/c

48. Carriage paid on goods purchased ₹2,000:

A. Carriage Inward A/c Dr. To Cash A/c
B. Carriage Outward A/c Dr. To Cash A/c
C. Cash A/c Dr. To Carriage Inward A/c
D. Purchases A/c Dr. To Carriage Outward A/c

49. Carriage paid on goods sold ₹2,500:

A. Carriage Inward A/c Dr. To Cash A/c
B. Carriage Outward A/c Dr. To Cash A/c
C. Purchases A/c Dr. To Cash A/c
D. Sales A/c Dr. To Cash A/c

50. A bill receivable received from debtor ₹30,000:

A. Debtor A/c Dr. To Bills Receivable A/c
B. Bills Receivable A/c Dr. To Debtor A/c
C. Cash A/c Dr. To Debtor A/c
D. Bills Payable A/c Dr. To Debtor A/c


51. A machine was purchased for ₹5,00,000. ₹20,000 was paid for transportation and ₹30,000 for installation. All were paid by bank. What amount should be debited to Machinery A/c?

A. ₹5,00,000
B. ₹5,20,000
C. ₹5,30,000
D. ₹5,50,000

52. A business purchased a building for ₹10,00,000 and paid ₹50,000 as registration charges and ₹25,000 as legal charges relating to acquisition. The amount to be capitalised is:

A. ₹10,00,000
B. ₹10,25,000
C. ₹10,50,000
D. ₹10,75,000

53. A machine costing ₹4,00,000 is purchased. ₹1,00,000 is paid immediately and the balance is payable to the supplier. The correct entry is:

A. Machinery Dr. ₹4,00,000; To Cash ₹1,00,000; To Supplier ₹3,00,000
B. Machinery Dr. ₹1,00,000; To Cash ₹1,00,000
C. Purchases Dr. ₹4,00,000; To Cash ₹1,00,000; To Supplier ₹3,00,000
D. Supplier Dr. ₹3,00,000; Machinery Dr. ₹1,00,000; To Cash ₹4,00,000

54. Goods costing ₹50,000 are sold for ₹65,000 on credit. Which statement regarding the journal entry is correct?

A. Only Debtor A/c is debited and Sales A/c credited; cost of goods is separately debited immediately in a traditional periodic system
B. Debtor A/c is debited ₹65,000 and Sales A/c credited ₹65,000
C. Purchases A/c is debited ₹50,000 and Debtor A/c credited ₹65,000
D. Sales A/c is debited ₹65,000 and Purchases A/c credited ₹50,000

55. A debtor owing ₹20,000 becomes insolvent and pays only 60 paise in the rupee. The correct entry is:

A. Cash Dr. ₹12,000; Bad Debts Dr. ₹8,000; To Debtor ₹20,000
B. Cash Dr. ₹20,000; To Debtor ₹20,000
C. Bad Debts Dr. ₹12,000; Cash Dr. ₹8,000; To Debtor ₹20,000
D. Debtor Dr. ₹20,000; To Cash ₹12,000; To Bad Debts ₹8,000

56. A debtor owing ₹50,000 pays ₹48,000 in full settlement. The correct entry is:

A. Cash Dr. ₹48,000; Discount Allowed Dr. ₹2,000; To Debtor ₹50,000
B. Cash Dr. ₹50,000; To Debtor ₹50,000
C. Debtor Dr. ₹50,000; To Cash ₹48,000; To Discount Received ₹2,000
D. Cash Dr. ₹48,000; Discount Received Dr. ₹2,000; To Debtor ₹50,000

57. A creditor allows a discount of ₹3,000 and receives ₹27,000 in full settlement. The correct entry is:

A. Creditor Dr. ₹30,000; To Cash ₹27,000; To Discount Received ₹3,000
B. Cash Dr. ₹27,000; Discount Allowed Dr. ₹3,000; To Creditor ₹30,000
C. Creditor Dr. ₹27,000; To Cash ₹27,000
D. Creditor Dr. ₹30,000; To Cash ₹30,000

58. A bill receivable of ₹40,000 accepted by a debtor is discounted with the bank for ₹38,000. The correct entry is:

A. Bank Dr. ₹38,000; Discount Dr. ₹2,000; To Bills Receivable ₹40,000
B. Bills Receivable Dr. ₹40,000; To Bank ₹38,000; To Discount ₹2,000
C. Bank Dr. ₹40,000; To Bills Receivable ₹40,000
D. Debtor Dr. ₹40,000; To Bank ₹38,000; To Discount ₹2,000

59. A bill receivable of ₹30,000 is endorsed to a creditor in settlement of a debt of ₹30,000. The correct entry in the endorser's books is:

A. Creditor Dr. ₹30,000; To Bills Receivable ₹30,000
B. Bills Receivable Dr. ₹30,000; To Creditor ₹30,000
C. Cash Dr. ₹30,000; To Bills Receivable ₹30,000
D. Creditor Dr. ₹30,000; To Cash ₹30,000

60. A bill receivable of ₹20,000 is dishonoured. The debtor's account should be:

A. Debited ₹20,000
B. Credited ₹20,000
C. Debited only with noting charges
D. Not affected

61. A bill receivable of ₹50,000 is dishonoured and the bank pays ₹1,000 noting charges on behalf of the holder. The debtor should ultimately be debited with:

A. ₹50,000
B. ₹49,000
C. ₹51,000
D. ₹1,000

62. A bill payable of ₹40,000 is dishonoured and ₹500 noting charges are paid by the holder on behalf of the acceptor. In the acceptor's books, the creditor is credited with:

A. ₹40,000
B. ₹40,500
C. ₹39,500
D. ₹500

63. A bill receivable is renewed at the request of the debtor. The old bill is cancelled. Interest of ₹2,000 is charged and the new bill is accepted for ₹32,000. If the old bill was ₹30,000, the amount of the new bill is:

A. ₹28,000
B. ₹30,000
C. ₹32,000
D. ₹34,000

64. A debtor owing ₹30,000 requests renewal of a bill. He pays ₹5,000 immediately and accepts a new bill for ₹26,000, including ₹1,000 interest. What was the amount of the old bill?

A. ₹25,000
B. ₹30,000
C. ₹31,000
D. ₹32,000

65. A bill receivable of ₹60,000 is retired before maturity at a rebate of ₹1,500. The correct entry is:

A. Cash Dr. ₹58,500; Rebate Allowed Dr. ₹1,500; To Bills Receivable ₹60,000
B. Cash Dr. ₹60,000; To Bills Receivable ₹60,000
C. Bills Receivable Dr. ₹60,000; To Cash ₹58,500; To Rebate Received ₹1,500
D. Cash Dr. ₹58,500; Discount Received Dr. ₹1,500; To Bills Receivable ₹60,000

66. A creditor agrees to accept ₹48,000 in full settlement of a debt of ₹50,000. The entry is:

A. Creditor Dr. ₹50,000; To Cash ₹48,000; To Discount Received ₹2,000
B. Cash Dr. ₹48,000; Discount Received Dr. ₹2,000; To Creditor ₹50,000
C. Creditor Dr. ₹48,000; To Cash ₹48,000
D. Creditor Dr. ₹50,000; To Cash ₹50,000

67. A debtor whose account shows ₹25,000 receives a discount of 10% and pays by cheque. The amount credited to Bank A/c is:

A. ₹22,500
B. ₹23,000
C. ₹24,000
D. ₹25,000

68. Goods worth ₹20,000 are withdrawn by the proprietor for personal use. Subsequently, he pays ₹5,000 cash into the business as compensation for the goods. The net effect on Capital A/c is:

A. Decrease of ₹20,000
B. Increase of ₹5,000
C. Decrease of ₹15,000
D. No effect

69. A proprietor takes goods costing ₹10,000 for personal use and pays ₹10,000 cash into the business. Which combination is correct?

A. Drawings Dr. ₹10,000; To Purchases ₹10,000, followed by Cash Dr. ₹10,000; To Capital ₹10,000
B. Drawings Dr. ₹10,000; To Cash ₹10,000 only
C. Cash Dr. ₹10,000; To Sales ₹10,000 only
D. Purchases Dr. ₹10,000; To Cash ₹10,000

70. Goods costing ₹30,000 are distributed as free samples. If the business uses the periodic inventory system, the appropriate adjustment is:

A. Advertisement Dr. ₹30,000; To Purchases ₹30,000
B. Advertisement Dr. ₹30,000; To Sales ₹30,000
C. Purchases Dr. ₹30,000; To Advertisement ₹30,000
D. Sales Dr. ₹30,000; To Advertisement ₹30,000

71. Goods costing ₹15,000 are given to a customer as a promotional gift. The appropriate treatment is:

A. Advertisement/Promotion Expense Dr. ₹15,000; To Purchases ₹15,000
B. Sales Dr. ₹15,000; To Purchases ₹15,000
C. Customer Dr. ₹15,000; To Sales ₹15,000
D. Drawings Dr. ₹15,000; To Purchases ₹15,000

72. A business receives ₹1,20,000 from a customer against an amount due of ₹1,25,000. The balance is allowed as discount. The correct discount is:

A. ₹3,000
B. ₹5,000
C. ₹10,000
D. ₹1,20,000

73. Rent of ₹60,000 is paid for six months in advance. At year-end, two months remain unexpired. The amount to be shown as prepaid rent is:

A. ₹10,000
B. ₹20,000
C. ₹30,000
D. ₹40,000

74. Salary paid during the year is ₹3,60,000. Salary outstanding at year-end is ₹40,000. Assuming no opening outstanding salary, salary expense for the year is:

A. ₹3,20,000
B. ₹3,60,000
C. ₹4,00,000
D. ₹40,000

75. Insurance paid during the year is ₹48,000. Insurance prepaid at year-end is ₹8,000. Assuming no opening prepaid insurance, insurance expense is:

A. ₹40,000
B. ₹48,000
C. ₹56,000
D. ₹8,000

76. Commission received during the year is ₹70,000. Commission accrued at year-end is ₹10,000 and commission received in advance is ₹5,000. Assuming no opening balances, income from commission is:

A. ₹65,000
B. ₹70,000
C. ₹75,000
D. ₹85,000

77. Rent received during the year is ₹90,000. Rent received in advance at year-end is ₹10,000 and rent accrued at year-end is ₹15,000. Assuming no opening balances, rent income is:

A. ₹85,000
B. ₹90,000
C. ₹95,000
D. ₹1,15,000

78. A debt of ₹20,000 previously written off as bad is recovered in cash. The appropriate entry under the usual treatment is:

A. Cash Dr. ₹20,000; To Bad Debts Recovered A/c ₹20,000
B. Debtor Dr. ₹20,000; To Cash ₹20,000
C. Bad Debts A/c Dr. ₹20,000; To Cash ₹20,000
D. Cash Dr. ₹20,000; To Debtor ₹20,000

79. A provision for doubtful debts is created for ₹12,000 for the first time. The correct entry is:

A. Provision for Doubtful Debts Dr. ₹12,000; To P&L A/c ₹12,000
B. P&L A/c Dr. ₹12,000; To Provision for Doubtful Debts A/c ₹12,000
C. Debtors Dr. ₹12,000; To Provision ₹12,000
D. Bad Debts Dr. ₹12,000; To Debtors ₹12,000

80. Existing provision for doubtful debts is ₹10,000 and the required provision is ₹14,000. The additional provision is:

A. ₹4,000 and P&L A/c is debited
B. ₹4,000 and P&L A/c is credited
C. ₹14,000 and P&L A/c is debited
D. ₹10,000 and P&L A/c is credited

81. Existing provision for doubtful debts is ₹15,000 and the required provision is ₹10,000. The reduction of provision is:

A. ₹5,000 credited to P&L A/c
B. ₹5,000 debited to P&L A/c
C. ₹10,000 credited to P&L A/c
D. ₹15,000 debited to P&L A/c

82. A debtor owes ₹1,00,000. Bad debts of ₹10,000 are written off, and a provision of 5% is required on the remaining debtors. The required provision is:

A. ₹4,000
B. ₹4,500
C. ₹5,000
D. ₹5,500

83. Debtors before adjustment are ₹2,00,000. Bad debts of ₹20,000 are to be written off, and a provision of 5% is required on the remaining debtors. The provision is:

A. ₹9,000
B. ₹10,000
C. ₹11,000
D. ₹12,000

84. Goods costing ₹25,000 are destroyed by fire. Insurance company admits a claim of ₹18,000. The net loss due to fire is:

A. ₹7,000
B. ₹18,000
C. ₹25,000
D. ₹43,000

85. A business purchases an old machine for ₹2,00,000 and spends ₹30,000 on dismantling the old machine at the site and ₹20,000 on installation. The total cost of the machine is:

A. ₹2,00,000
B. ₹2,20,000
C. ₹2,30,000
D. ₹2,50,000

86. A machine is purchased for ₹5,00,000. Installation wages are ₹40,000. After installation, ₹10,000 is spent on routine repairs. The amount capitalised is:

A. ₹5,00,000
B. ₹5,10,000
C. ₹5,40,000
D. ₹5,50,000

87. A business pays ₹1,00,000 to acquire a patent and ₹20,000 as registration charges directly related to obtaining the patent. The amount debited to Patent A/c is:

A. ₹1,00,000
B. ₹1,20,000
C. ₹20,000
D. ₹80,000

88. A loan of ₹5,00,000 is taken. Interest accrued but unpaid is ₹30,000. The correct year-end entry for the accrued interest is:

A. Interest A/c Dr. ₹30,000; To Interest Accrued/Outstanding A/c ₹30,000
B. Interest Outstanding A/c Dr. ₹30,000; To Interest A/c ₹30,000
C. Loan A/c Dr. ₹30,000; To Interest A/c ₹30,000
D. Cash A/c Dr. ₹30,000; To Interest A/c ₹30,000

89. A business pays ₹60,000 interest on a loan, of which ₹10,000 relates to the previous accounting year. Current year's interest expense is:

A. ₹50,000
B. ₹60,000
C. ₹70,000
D. ₹10,000

90. A company receives ₹2,40,000 as annual rent in advance for the next 12 months. At the date of receipt, the correct treatment is:

A. Cash/Bank Dr. ₹2,40,000; To Rent Income ₹2,40,000
B. Cash/Bank Dr. ₹2,40,000; To Rent Received in Advance ₹2,40,000
C. Rent Income Dr. ₹2,40,000; To Cash ₹2,40,000
D. Rent Received in Advance Dr. ₹2,40,000; To Cash ₹2,40,000

91. A customer pays ₹50,000 in advance for goods to be supplied next month. At the time of receipt, the correct entry is:

A. Cash/Bank Dr. ₹50,000; To Sales ₹50,000
B. Cash/Bank Dr. ₹50,000; To Advance from Customer ₹50,000
C. Customer Dr. ₹50,000; To Cash ₹50,000
D. Sales Dr. ₹50,000; To Cash ₹50,000

92. A supplier receives ₹40,000 as advance from the business against goods to be supplied later. In the business's books, the correct entry is:

A. Supplier A/c Dr. ₹40,000; To Bank ₹40,000
B. Advance to Supplier A/c Dr. ₹40,000; To Bank ₹40,000
C. Purchases A/c Dr. ₹40,000; To Bank ₹40,000
D. Bank A/c Dr. ₹40,000; To Supplier A/c ₹40,000

93. A customer who owed ₹80,000 gives a cheque of ₹78,000 in full settlement. The cheque is deposited immediately into bank. The correct entry is:

A. Bank Dr. ₹78,000; Discount Allowed Dr. ₹2,000; To Customer ₹80,000
B. Cash Dr. ₹78,000; Discount Received Dr. ₹2,000; To Customer ₹80,000
C. Bank Dr. ₹80,000; To Customer ₹80,000
D. Customer Dr. ₹80,000; To Bank ₹78,000; To Discount Received ₹2,000

94. A creditor of ₹1,00,000 accepts a cheque of ₹96,000 in full settlement. The correct entry is:

A. Creditor Dr. ₹1,00,000; To Bank ₹96,000; To Discount Received ₹4,000
B. Bank Dr. ₹96,000; Discount Allowed Dr. ₹4,000; To Creditor ₹1,00,000
C. Creditor Dr. ₹96,000; To Bank ₹96,000
D. Creditor Dr. ₹1,00,000; To Bank ₹1,00,000

95. A business purchases goods of ₹1,00,000. It pays ₹40,000 immediately and agrees to pay the balance later. The supplier subsequently allows a trade discount of ₹5,000 before recording the transaction. The amount payable to supplier is:

A. ₹60,000
B. ₹55,000
C. ₹65,000
D. ₹1,00,000

96. A trade discount of 10% is allowed on goods with a list price of ₹50,000. The goods are purchased on credit. Which amount is recorded as Purchases?

A. ₹50,000
B. ₹45,000
C. ₹5,000
D. ₹55,000

97. A cash discount of ₹2,000 is received after recording the purchase transaction. The discount should generally be recorded as:

A. Reduction in Purchases A/c in all circumstances
B. Discount Received A/c
C. Capital Reserve A/c
D. Sales A/c

98. A business receives a cheque of ₹50,000 from a debtor and deposits it into bank. The cheque is dishonoured later. The entry on dishonour, ignoring bank charges, is:

A. Debtor Dr. ₹50,000; To Bank ₹50,000
B. Bank Dr. ₹50,000; To Debtor ₹50,000
C. Cash Dr. ₹50,000; To Debtor ₹50,000
D. Debtor Dr. ₹50,000; To Cash ₹50,000

99. A cheque of ₹30,000 received from a debtor is endorsed to a creditor. The cheque is subsequently dishonoured and the creditor pays ₹500 noting charges. The amount ultimately recoverable from the debtor is:

A. ₹30,000
B. ₹30,500
C. ₹29,500
D. ₹500

100. A business receives ₹1,00,000 from a customer against an invoice of ₹1,10,000. It allows ₹10,000 as cash discount. Later, the customer disputes the discount and pays another ₹2,000. Ignoring the dispute for accounting treatment, the total amount received from the customer is:

A. ₹1,00,000
B. ₹1,02,000
C. ₹1,08,000
D. ₹1,10,000

Answer Key

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QAnsQAnsQAnsQAns
1A26B51C76C
2B27B52D77C
3A28B53A78A
4B29B54B79B
5B30B55A80A
6B31B56A81A
7B32A57A82B
8B33A58A83C
9B34B59A84A
10B35B60A85D
11B36A61C86C
12B37B62B87B
13B38B63C88A
14A39A64B89A
15A40A65A90B
16B41A66A91B
17B42A67A92B
18A43A68C93A
19B44A69A94A
20A45B70A95B
21B46B71A96B
22A47B72B97B
23B48A73B98A
24A49B74C99B
25B50B75A100B


Bhupendra Lad

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