Free Double Entry and Books of Prime Entry MCQs with Answers
34 Double Entry and Books of Prime Entry MCQs from Accounting, each with the correct answer and a written explanation of why it is correct. Free and unlimited, with no account needed.
Double entry records every transaction with equal debit and credit entries, based on the accounting equation and the classification of assets, liabilities, capital, income and expenses. Books of prime entry include the sales, purchases, returns and cash books, journal, and source documents used before transactions are posted to ledger accounts.
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- A. Cash account
- B. Sales account
- C. Debtor's account
- D. Capital account
Explanation: The debtor's liability is reduced when payment is received, so the debtor's personal account is credited.
Correct answer: Debtor's account- A. Bank account
- B. Capital account
- C. Cash account
- D. Rent account
Explanation: Rent is an expense incurred by the business, so the rent account is debited. The bank account is credited because money leaves the bank.
Correct answer: Rent account- A. Journal proper
- B. Sales day book
- C. Purchases day book
- D. Cash book
Explanation: The purchases day book is restricted to credit purchases of goods for resale.
Correct answer: Journal proper- A. Purchases account
- B. Cash account
- C. Hamid's account
- D. Sales account
Explanation: Hamid is the supplier and becomes a creditor, so his personal account is credited.
Correct answer: Hamid's account25. Which book of prime entry is used to record credit notes received from suppliers for goods returned?
- A. Sales returns book
- B. Bills payable book
- C. Journal proper
- D. Purchases returns book
Explanation: A credit note received from a supplier usually confirms that goods have been returned to that supplier.
Correct answer: Purchases returns book- A. Bills payable book
- B. Bills receivable book
- C. Purchases day book
- D. Journal proper
Explanation: An accepted bill creates an obligation for the business to pay later, making it a bill payable.
Correct answer: Bills payable book- A. Debit purchases and credit drawings
- B. Debit drawings and credit purchases
- C. Debit capital and credit sales
- D. Debit cash and credit drawings
Explanation: Goods taken for private use reduce the goods available for business, so purchases are credited.
Correct answer: Debit drawings and credit purchases- A. Customer's account
- B. Sales account
- C. Sales returns account
- D. Cash account
Explanation: A sales return reduces the business's sales revenue, so the sales returns account is debited.
Correct answer: Sales returns account- A. Payment to a supplier by cheque
- B. Bank charges deducted by the bank
- C. Discount allowed to a debtor
- D. Cash received from a customer
Explanation: Receipts of cash or bank funds are entered on the debit side of the cash book.
Correct answer: Cash received from a customer- A. To calculate gross profit
- B. To test arithmetical agreement of debits and credits
- C. To record daily transactions
- D. To prepare source documents
Explanation: A trial balance lists ledger balances to check whether total debits equal total credits.
Correct answer: To test arithmetical agreement of debits and credits- A. Purchases account
- B. Suppliers account
- C. Purchases returns account
- D. Sales returns account
Explanation: The purchases returns book records goods returned to suppliers, so its total is credited to the purchases returns account.
Correct answer: Purchases returns account32. The total of the discount received column in a three-column cash book is posted to which account?
- A. Discount allowed account
- B. Cash account
- C. Discount received account
- D. Trade expenses account
Explanation: Discount received is an income or gain for the business, so the discount received account is credited with the total.
Correct answer: Discount received account- A. A credit sale of trading goods
- B. A credit purchase of trading goods
- C. A return of goods to a supplier
- D. A transfer from one ledger account to another
Explanation: A transfer between ledger accounts does not represent a routine sale, purchase or return of goods, so it is recorded in the journal…
Correct answer: A transfer from one ledger account to another34. A credit purchase of stationery for office use is normally recorded in which book of prime entry?
- A. Journal proper
- B. Cash book
- C. Purchases day book
- D. Purchases returns book
Explanation: The purchases day book is reserved for credit purchases of goods intended for resale.
Correct answer: Journal proper