Chapter MCQ Test 2 — Special Purpose (Subsidiary) Books
10 Questions • 12 min • Chapter MCQ
12:00
Question 1 of 10
A firm sells its old delivery van on credit to a garage. This is recorded in the:
Journal proper (sale of an asset, not goods)
Sales book
Cash book
Bills receivable book
Explanation: The sales book is only for credit sales of goods; selling an asset on credit goes in the journal proper.
Question 2 of 10
Goods list price Rs 50,000, trade discount 10%, then 18% GST (intra-state). The invoice total is:
Rs 53,100
Rs 50,000
Rs 45,000
Rs 59,000
Explanation: Net 45,000 after trade discount; GST 18% = 8,100 (CGST 4,050 + SGST 4,050); total 45,000 + 8,100 = 53,100.
Question 3 of 10
Why is trade discount never opened as a separate account while cash discount is?
Trade discount is deducted before recording; cash discount arises only at payment
Trade discount is illegal
Cash discount is not real
They are the same
Explanation: Only the post-trade-discount net figure enters the books, whereas cash discount is an actual gain/expense recorded when payment occurs.
Question 4 of 10
Purchases book total for the month is Rs 1,20,000. This is posted to:
The debit of Purchases A/c
The credit of Purchases A/c
The debit of Sales A/c
The cash book
Explanation: The periodic purchases-book total is debited to the Purchases Account; suppliers are credited individually.
Question 5 of 10
A purchase of goods for cash is wrongly entered in the purchases book. The effect is that:
Purchases and the supplier are overstated; it should have gone in the cash book
Nothing is wrong
Sales are overstated
GST doubles
Explanation: Only credit purchases of goods belong in the purchases book; a cash purchase belongs in the cash book.
Question 6 of 10
Input GST paid on purchases is valuable to a business because it:
Can be set off (input tax credit) against output GST payable
Is an expense that lowers profit
Is a gift to suppliers
Cannot be recovered
Explanation: Input tax credit lets the firm reduce its GST liability by the GST already paid on purchases.
Question 7 of 10
Which of these correctly pairs the book with its source document?
Sales return book → credit note
Purchases book → credit note
Sales book → debit note
Purchases return book → credit note
Explanation: When a customer returns goods we issue a credit note, recorded in the sales return book.
Question 8 of 10
A wholesaler offers '20% trade discount and 2% cash discount for payment within 10 days'. On a Rs 1,00,000 list order paid in 8 days, the cash paid is:
Rs 78,400
Rs 80,000
Rs 1,00,000
Rs 98,000
Explanation: Net after 20% trade discount = 80,000; 2% cash discount = 1,600; cash paid = 80,000 − 1,600 = 78,400.
Question 9 of 10
The journal proper is best described as:
The book for transactions that fit no special book
The book for all cash
The book for credit sales
A type of ledger
Explanation: It is the residual book for non-routine entries (opening, closing, adjusting, rectifying, asset purchases on credit).
Question 10 of 10
On an inter-state sale of Rs 40,000 at 12% GST, the tax charged is:
IGST Rs 4,800
CGST 2,400 + SGST 2,400
No GST
IGST Rs 12,000
Explanation: Inter-state supplies attract IGST at the full rate: 12% of 40,000 = Rs 4,800 IGST.