Accounting Equation and Journal | JKSSB FAA MCQs Pdf

Accounting Equation and Journal MCQs:

Welcome to this quiz on Accounting Equation and Journal! Test your understanding of fundamental concepts in accounting by answering the multiple-choice questions below. Choose the correct option for each question, and check your answers at the end. Good luck!

Question 1: What is the fundamental accounting equation?

A. Assets = Liabilities – Owner’s Equity

B. Assets = Liabilities + Owner’s Equity

C. Assets – Liabilities = Owner’s Equity

D. Liabilities + Owner’s Equity = Assets

Answer:

Question 2: Which of the following transactions would increase both assets and liabilities?

A. Purchasing inventory on credit

B. Selling goods for cash

C. Paying off a bank loan

D. Receiving a cash advance from a customer

Answer:

Question 3: What is the purpose of a journal in accounting?

A. To summarize financial statements

B. To record transactions in chronological order

C. To calculate net income

D. To prepare trial balances

Answer:

Question 4: In a journal entry, where is the credit entry typically recorded?

A. Left side

B. Right side

C. Top section

D. Bottom section

Answer:

Question 5: Which of the following is an example of an adjusting journal entry?

A. Recording a sale of goods on credit

B. Recognizing accrued expenses

C. Receiving payment from a customer

D. Issuing additional shares of stock

Answer:

Question 6: When a business owner invests personal funds into the business, how does it affect the accounting equation?

A. Increases assets and decreases liabilities

B. Increases assets and increases owner’s equity

C. Decreases assets and increases liabilities

D. Decreases assets and decreases owner’s equity

Answer:

Question 7: What does the term “double-entry accounting” mean?

A. Recording each transaction twice

B. Having two accountants verify each entry

C. Recording equal and opposite entries for each transaction

D. Using two different accounting systems simultaneously

Answer:

Question 8: Which financial statement is prepared using information from the journal entries?

A. Balance Sheet

B. Income Statement

C. Cash Flow Statement

D. Statement of Retained Earnings

Answer:

Question 9: What is the normal balance of an expense account?

A. Credit

B. Debit

C. Neutral

D. It depends on the type of expense

Answer:

Question 10: What is the purpose of a trial balance?

A. To summarize revenue and expenses

B. To verify the accuracy of debit and credit entries

C. To prepare financial statements

D. To record adjusting entries

Answer:

Answers:

1. B. Assets = Liabilities + Owner’s Equity
2. A. Purchasing inventory on credit
3. B. To record transactions in chronological order
4. B. Right side
5. B. Recognizing accrued expenses
6. B. Increases assets and increases owner’s equity
7. C. Recording equal and opposite entries for each transaction
8. A. Balance Sheet
9. B. Debit
10. B. To verify the accuracy of debit and credit entries