Accounting MCQS
Accounting MCQS
Accounting MCQS
Q-17 The gross decrease in economic benefits for the business are what?
A) Expenses
B) Obligations
C) Creditors
D) Income or gain
Q-18 An asset must be _______ by the business to be shown as an asset in its
"balance sheet"
A) Possessed
B) Owned
C) Controlled
D) Used
Q-19 Liability are arisen from which of the following events?
A) Present event
B) Future event
C) Past event
D) Non of them
Q-20 Which of the following can be considered as the most important phase
of accounting cycle and it is the primarily objective of financial accounting?
A) Identifying transactions
B) Preparing "T Accounts"
C) Preparing financial statements
D) Preparing trial balances
Q-21 Which is the most important characteristic that all assets of a business
have?
A) Long life of assets
B) Value of assets
C) Intangible nature of assets
D) Future economic benefits
Q-22 What is the basic accounting equation?
A) Capital+Liabilities=Assets
B) Assets+ liabilities =Capital
C) Capital+assets=liabilities
D) Liabilities+Capital
Q-23 Which of the following is a liability?
A) Cash
B) Equipment
C) Debtors
D) Creditors
Q-24 What is equity?
A) Cash from the business
B) liability of a business
C) Owner's claim on total assets
B) Sales journal
C) Purchases return journal
D) Sales return journal
Q-3 Transactions that a BUSINESS doesn't record in any specialised
journal are recorded in which of the following journals or day books?
A) Cash payments journal
B) Cash receipts journal
C) Purchases return journal
D) General journal
Q-4 Another name of journal is
A) Specialized journal
B) Day book
C) Cash book
D) Record book
Q-5 Which of the following specialised journals will record "goods
returned by the BUSINESS "?
A) Purchase journal
B) Sales journal
C) Purchases return journal
D) Sales return journal
Q-6 Sales and purchase journal don't record
A) Credit sales
B) Credit purchases
C) Credit sales and purchases
D) Cash sales and purchases
Q- 7 Cash received from debtor is recorded in which of the following
SPECIALIZED journals?
A) Purchase journal
B) Sales journal
C) Cash receipts
D) Cash payments journal
Q-8 Which of the following is a type of cash receipt journal + cash
payment journal?
A) Bank statement
B) Statement of cash flow
C) Cash book
D) Cash documents
9. Cash purchases is recorded in which of the following specialized
journals?
A) Purchase journal
B) Sales journal
C) Purchases return journal
B) General journal
C) Source document
D) Cash book
17. BUSINESS paid rent amounting to $100" which of the following
specialized journals records this transaction?
A) Cash receipts journal
B) Cash payments journal
C) Sales journal
D) Purchase journal
Q-18 Credit memo or credit note No. is entered in which of the
following journal?
A) General journal
B) Cash journal
C) Purchase journal
D) Sales return day book
ANSWER:
1 D 2 B 3 D 4 B 5 C 6 D 7 C 8 C 9 D 10 A
11 A 12 A 13 C 14 B 15 B 16 C 17 B 18 A.
1.The process of recording is done
A) Two times a year
B) once a year
C) Frequently during the accounting period
D) At the end of a accounting period
2.General journal is a book of _______ entries
A) First
B) Original
C) Secondary
D) Generic
3. The process of recording transactions in different journals is
called
A) Posting
B) Entry making
C) Adjusting
D) Journalizing
4. Every business transaction affects at least ________ accounts
A) One
B) Two
C) Three
D) Infinite
5. Discount allowed is a kind of deduction from
A) Account payable
B) Account receivable
C) Cash account
D) Discount account
A)
B)
C)
D)
Cash
Debtor
Creditor
Purchases
D) Increase by $10,000
7) If the business's owner withdraws cash for his/her personal use what will be the effect
on capital?
A) Increase in capital
B) Remain the same
C) Decrease in capital
D) No effect on capital
8) Net income equal to Revenues minus
A) Gains
B) Depreciation
C) Expenses
D) Capital expenditures
9) Collection of account receivable will
A) Increase assets and decrease assets
B) Increase assets and decrease liabilities
C) Increase assets and increase capital
D) Increase assets and increase cash
10) Payment of expenses will ______ the assets
A) Increase
B) Reduce
C) apportion
D) Overstate
11) Which of the following is the practical implementation of the accounting equation?
A) Cash flow statement
B) Income statement
C) Statement of changes in equity
D) Statement of financial position
12)Which of the following accounting equation is correct?
A) Cash+Other assets=Capital-Liabilities
B) Capital+ Liabilities=Assets+Income
C) Assets-Liabilities=Capital
D) Assets+Capital=Liabilities
13) Fresh capital introduction will increase
A) Assets and liabilities
B) Assets and equity
C) Liabilities and equity and bank balance
D) Capital and liabilities
14) Cash received for services rendered will
A) Increase cash and liability
B) Increase equity and liability
C) Increase fixed assets and cash
D) Increase cash and equity
c. Cash balance
11)
Which of the following statements is incorrect regarding capital
account?
a. Debit increases the capital account balance
b. Credit increases the capital account balance
c. Fresh capital increases the capital account balance
d. Net income increases the capital account balance
12)
Which of the following is the normal balance of a rent expense
account?
a. Credit balance
b. Cash balance
c. Overdraft
d. Debit balance
13)
a.
b.
c.
d.
a.
b.
c.
d.
a.
b.
c.
d.
14)
15)
16)
d. Insurance expense
19)
Which of the following accounts are closed at the end of an
accounting period?
a. Nominal accounts
b. Balance sheet accounts
c. Real accounts
d. None of them
20)
a.
b.
c.
d.
Answers:
1 c 2c 3 a 4 a 5 c 6 c 7 d 8 a 9 b 10 b 11 a
12 d 13 a 14 c 15 b 16 b 17 c 18 a 19 a 20 a.
7)
8)
17)
18)
19)
20)
D) Cash reserve
Postage stamps on hand are considered as
A) Bank
B) Prepaid expenses
C) Accounts receivable
D) Creditor
Petty cash fund is supposed to be replenished
A) Every day
B) Every half year
C) Every year
D) At the end of every accounting period
Which of the following is generally not the party to a check?
A) Payee
B) Payer
C) Bank
D) Seller
A credit balance in cash book indicates
A) Bank balance
B) Cash at bank
C) Bank overdraft
D) Bank underdrift
Answers
1 B 2 B 3 B 4 C 5 C 6 B 7 B 8 A 9 B 10 B 11 A 12 B 13 D 14 D 15
B 16 C 17 B 18 D 19 D 20 C.
201.
The portion of the acquisition cost of the asset yet to be allocated is known as
(a) Written down value
(b) Accumulated value
(c) Salvage value
(d) Residual Value
202. Which of the following statements is true with regard to written down value
method of
depreciation?
i. The rate at which the asset is written off reduces year after year
ii. The amount of depreciation provided reduces from year to year
iii. The rate of depreciation as well as the amount of depreciation reduce year
after year
iv. The value of the asset gets reduced to zero over a period of time
(a) Only (i) above
(b) Only (ii) above
(c) Both (i) and (ii) above
(d) (i),(ii) and (iii) above
203. The accounting process of gradually converting the unexpired cost of fixed
assets into expenses
over a series of accounting periods is
(a) Depreciation
(b) Physical deterioration of the asset
207.
208.
209.
Depreciation is a process of
(a) Valuation of fixed assets
(b) Allocation of cost over the useful life of assets
(c) Generating funds replacements of the assets
(d) Avoidance of tax
210.
(a) 27%
(b) 33%
(c) 10%
(d) 15%
212.
213.
214.
217.
218.
(d) Bad debts could exceed the provision for bad debts
226. If actual bad debts are more than the provision for bad debts, then there will
be a
(a) Credit balance of Provision for Bad Debts Account
(b) Debit balance of Provision for Bad Debts Account
(c) Debit balance of Bad Debts Account
(d) Debit balance of Discount on Debtors Account
227. The creation of provision for doubtful debts given as an adjustment requires
(a) Debit Profit and Loss Account and deduct the provision from debtors
(b) Credit Profit & Loss Account and deduct the provision from debtors
(c) Credit Profit and Loss Account and add the provision to debtors
(d) Debit Profit & Loss Account and add the provision to debtors
228. Under the direct write-off method of recognizing a bad debt expense. Which of
the following
statements is/are true?
(a) The bad debt expense is not matched with the related sales
(b) Revenue is overstated in the year of sales
(c) It violates the matching principle of accounting
(d) All of the above
229. At the time of preparation of financial accounts, bad debt recovered account
will be transferred to
(a) Debtors A/c
(b) Profit & Loss A/c
(c) Profit & Loss Adjustment A/c
(d) Profit & Loss Appropriation A/c
230. The balance of Revaluation Reserve pertaining to an asset that has been
disposed off or retired can be transferred to
(a) General Reserve A/c
(b) Profit & Loss A/c
(c) Asset A/c
(d) Capital Reserve A/c
231. Property, Plant and Equipment are conventionally presented in the Balance
Sheet at
(a) Replacement cost Accumulated Depreciation
(b) Historical cost Salvage Value
(c) Historical cost Depreciation portion thereof
(d) Original cost adjusted for general price-level changes
[Hints: (c) As per AS-10 on fixed assets, property plant equipment should be
presented in the
Balance Sheet at historical cost (gross book value) less depreciation = net book
value.]
245. Which of the following shall not be deducted from net profit while calculating
managerial
remuneration?
(a) Loss on sale of undertaking
(b) Debts considered bad and written off
(c) Liability arising from a breach of contract
(d) Directors remuneration
246. Which of the following equations is correct?
(a) Gross Profit+ Sales+ Direct expenses+ Purchases+ Closing stock = Opening
stock
(b) Gross Profit+ Sales+ Direct expenses+ Purchases- Closing stock = Opening
Stock
(c) Gross Profit + Opening Stock + Direct expenses + Purchases- Closing stock =
Sales
(d) Gross Profit Opening Stock + Direct expenses + Purchases +Closing stock =
Sales
247. Which of the following is not true with regard to preparation of Profit & Loss
Account?
(a) Profit & Loss Account is prepared for a certain period and hence it is an interim
statement
(b) Profit & Loss Account does not disclose the effect of non-financial items
(c) Net Profits are ascertained on the basis of current costs
(d) Net Profits as disclosed by P&L Account is not absolute
248. The Profit and Loss Account shows the
(a) Financial results of the concern for a period
(b) Financial position of the concern on a particular date
(c) Financial results of the concern on a particular date
(d) Cost of goods sold during the period
249. Which of the following statements is true?
(a) Provision for doubtful debts represents the amount that cannot be collected
(b) Cash balance on hand shows whether the business has earned Profit or Loss
(c) Free samples received are business gains
(d) The WDV of an asset depreciated on the reducing balance method can never
become zero
(d) 9876
277. From the following details what will be the partners commission?
Net profit before charging partners commission `65,000. Partners commission 11%
before
charging such commission
(a) 6441
(b) 5431
(c) 7150
(d) 5876
278. Arrangement of Balance Sheet in a logical order is known as
(a) Dressing Balance Sheet
(b) Marshalling Balance Sheet
(c) Formatting Balance Sheet
(d) Make up of Balance Sheet
279. Improper valuation of inventory effects
(a) Profitability
(b) Financial position
(c) Both
(d) Cash inflows
280. Find the cost of goods sold if goods are sold for ` 2,000 at 25% profit on cost
(a) ` 1,600
(b) ` 1,500
(c) ` 1,000
(d) ` 1,800
281. Find the value of opening stock from the following data.
Purchases ` 1,50,000, Closing stock ` 30,000 , Sales `2,20,000, Gross profit `
40,000.
(a) ` 50,000
(b) ` 55,000
(c) ` 60,000
(d) ` 65,000
282. A Bill of Exchange is drawn on 1st April, 2012 payable after 3 months. The due
date of the bill is
(a) 30th June,2012
(b) 1 st July,2012
(c) 4 th July,2012
(d) 4 th August,2012
[Hints: (d) Bill drawn on 1st April, 2012 payable after 3 months. The due date is 1st
April, 2012 + 3
months + 3 days of grace = 4th July, 2012.]
283. Which of the following statements is/are true?
(a) Noting charges are paid by the holder of the bill on the date of default
(b) A bill can be endorsed only thrice
(c) On renewal of bill the old bill is canceled
(d) Both (a) and (c) above
284. When bill discounted with the bank is dishonored?
(a) Acceptors Account is debited in the books of drawer
(b) Bills Receivable Account is credited in the books of drawer
(c) Bank Account is debited in the books of drawer
(d) Bills Payable Account is debited in the books of drawer
285. Which of the following statements is/are false?
(a) Accommodation bills are drawn for the benefit of drawer only
(b) Bills sent for collection is an asset
(c) Bills of exchange cannot be drawn on a banker
(d) Both (a) and (c) above
286. In the books of the drawer, the accounting treatment involved on receipt of a
bill of exchange duly accepted by the drawee is
i. Debit Bills Receivable Account
ii. Debit Drawees Account
iii. Credit Drawees Account
iv. Credit Sales Account
(a) Only (i) above
(b) Both (ii) and (iv) above
(c) Both (i) and (iii) above
(d) Both (i) and (iv) above
287. The noting charges levied on dishonour of an endorsed bill by the Notary Public
are to be borne by
(a) The drawer of the bill
(b) The person responsible for dishonour
(c) The holder of the bill
(d) The endorser of the bill
288. The drawer of a trade bill passes relevant entries with regard to the transaction
involved in it. But, in
case of an accommodation bill, he passes an entry in addition to the usual entries.
The additional
entry so passed is with respect to
(a) Discounting of the bill with the bank
(b) Payment of the bill on due date
(c) Remitting or receiving the amount
(d) Sending the bill to bank for collection
289. Under which of the following situations, is journal entry not passed in the books
of the drawer?
(a) When a discounted bill is honoured by the drawee on the due date
(b) When a bill is sent to the bank for collection
(c) When a bill is renewed at the request of the drawee
(d) When a debtor accepts a bill drawn by the drawer
(a) 1981
(b) 1881
(c) 1871
(d) 2001
a 202 b 203 a
a 205 a 206 b 207 c 208 c 209 b 210 b
a 212 a 213 d 214 d 215 a 216 b 217 d
a 219 a 220 d 221 c 222 a 223 d 224 b
b 226 b 227 a 228 d 229 b 230 d 231 c
d 233 a 234 a 235 d 236 a 237 b 238 b
c 240 c 241 d 242 d 243 d 244 a 245 d
c 247 a 248 a 249 d 250 c 251 c 252 a
d 254 d 255 d 256 d 257 c 258 d 259 c
d 261 d 262 d 263 c 264 d 265 a 266 a
d 268 c 269 b 270 c 271 a 272 c 273 c
c 275 a 276 a 277 c 278 b 279 c 280 a
c 282 c 283 d 284 a 285 d 286 c 287 b
c 289 a 290 c 291 c 292 a 293 d 294 d
a 296 b 297 d 298 a 299 a 300 b 301 b