MCQOPTIONS
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MCQOPTIONS
This section includes 657 Mcqs, each offering curated multiple-choice questions to sharpen your Testing Subject knowledge and support exam preparation. Choose a topic below to get started.
| 1. |
Which of the following is a double entry for deprecation expenses? |
| A. | Accumulated depreciation Debit and depreciation expenses Credit |
| B. | Depreciation expenses Debit and accumulated depreciation Credit |
| C. | Cash Debit and Depreciation expenses Credit |
| D. | Depreciation expenses Debit and Cash Credit |
| Answer» C. Cash Debit and Depreciation expenses Credit | |
| 2. |
How trial balance shows the accumulated depreciation? |
| A. | as a debit item |
| B. | as a credit item |
| C. | It doesn't show |
| D. | no |
| Answer» C. It doesn't show | |
| 3. |
Which of the following is the normal balance of an accumulated depreciation account? |
| A. | Debit balance |
| B. | Credit balance |
| C. | Nil balance |
| D. | no |
| Answer» C. Nil balance | |
| 4. |
A company purchased a vehicle for Rs.6000. It will be used for 5 years and its residual value is expected to be Rs.1000. What is the annual amount of depreciation using straight line method of depreciation? |
| A. | 1000 |
| B. | 2000 |
| C. | 3000 |
| D. | 5000 |
| Answer» B. 2000 | |
| 5. |
Under which depreciation method, the amount of depreciation expenses remains same throughtout the life of the asset? |
| A. | Straight line method |
| B. | Reducing balance method |
| C. | Number of units produced method |
| D. | Machine hours method |
| Answer» B. Reducing balance method | |
| 6. |
What is depreciation? |
| A. | Cost of a fixed asset |
| B. | Cost of a fixed asset's repair |
| C. | The residual value of a fixed asset |
| D. | Portion of a fixed asset's cost consumed during the current accounting period |
| Answer» E. | |
| 7. |
A current asset that is convertible to cash within 3 months can be referred to as |
| A. | Cash asset |
| B. | Operating asset |
| C. | Intangible assets |
| D. | Cash equivalent |
| Answer» E. | |
| 8. |
Which of the following does not appear in Balance sheet? |
| A. | Building |
| B. | Cash |
| C. | Goodwill |
| D. | Rent expenses |
| Answer» E. | |
| 9. |
Goodwill is classified as which one of the following assets? |
| A. | Fixed |
| B. | Long term |
| C. | Current |
| D. | Intangible |
| Answer» E. | |
| 10. |
Which of the following financial statements shows the movement of cash and cash equivalents during an accounting period? |
| A. | Income statement |
| B. | Balance sheet |
| C. | Cash flow statement |
| D. | Statement of changes in equity |
| Answer» D. Statement of changes in equity | |
| 11. |
Which of the following financial statements shows the financial position of a business at a specific date? |
| A. | Balance sheet |
| B. | Income statement |
| C. | Cash flow statement |
| D. | Statement of changes in equity |
| Answer» B. Income statement | |
| 12. |
Purchases + opening stock - closing stock = ? |
| A. | Amount of sales |
| B. | Gross profit |
| C. | Cost of goods sold |
| D. | Net income |
| Answer» D. Net income | |
| 13. |
Financial statements mainly help in |
| A. | Assumption of economic events |
| B. | Anticipation of economic events |
| C. | Recording of economic events |
| D. | Communication of economic events |
| Answer» E. | |
| 14. |
Net profit is computed in which of the following? |
| A. | Balance sheet |
| B. | Income statement |
| C. | Cash flow statement |
| D. | Statement of changes in equity |
| Answer» C. Cash flow statement | |
| 15. |
Depreciation is charged on fixed assets to comply with which of the following accounting principle? |
| A. | Matching concept |
| B. | Prudence concept |
| C. | Timeliness concept |
| D. | Reliability concept |
| Answer» B. Prudence concept | |
| 16. |
Land on lease should be shown in Blance sheet contrary to the fact that the company does not own that piece of land is the implementation of which accounting concept? |
| A. | Matchig concept |
| B. | Accrual concept |
| C. | Prudence concept |
| D. | Substance over form concept |
| Answer» E. | |
| 17. |
Information about an item is _______ if its ommission or misstatement might influence the financial decision of the users taken on the basis of that information |
| A. | Concrete |
| B. | Complete |
| C. | Immaterial |
| D. | Material |
| Answer» E. | |
| 18. |
Which of the following is time spann into which the total life of a business is divided for the purpose of preparing financial statements? |
| A. | Fiscal year |
| B. | Calendar year |
| C. | Accounting period |
| D. | Accrual period |
| Answer» D. Accrual period | |
| 19. |
American companies prepare their financial statement in Dollars whereas Japanese companies produce financial statement in Yen. This is an example of: |
| A. | Stable monetary unit concept |
| B. | Unit of measurement concept |
| C. | Money value concept |
| D. | Current swap concept |
| Answer» C. Money value concept | |
| 20. |
The matching concept matches which of the following? |
| A. | Asset with liabilities |
| B. | Capital with income |
| C. | Revenues with expenses |
| D. | Expenses with capital |
| Answer» D. Expenses with capital | |
| 21. |
The revenue recognition principle dictates that all types of incomes should be recorded or recognized when |
| A. | Cash is received |
| B. | At the end of accounting period |
| C. | When they are earned |
| D. | When interest is paid |
| Answer» D. When interest is paid | |
| 22. |
The concept of 'separate entity' is applicable to which of the following types of businesses? |
| A. | Sole proprietorship |
| B. | Corporation |
| C. | Partnership |
| D. | All of the above |
| Answer» E. | |
| 23. |
Does prudence concept allow a business to build substantially higher reserves or provisions than that are actually required? |
| A. | Yes |
| B. | No |
| C. | To some extent |
| D. | It depends on the type of business |
| Answer» C. To some extent | |
| 24. |
Which of the following is not regarded as the fundamental concept that is identified by IAS-1? |
| A. | The going concern concept |
| B. | The separate entity concept |
| C. | The prudence concept |
| D. | Correction concept |
| Answer» E. | |
| 25. |
Earned but not yet received income is treated as |
| A. | Asset |
| B. | Liability |
| C. | Loss |
| D. | Capital |
| Answer» B. Liability | |
| 26. |
Revenue earned but not yet received by the business is known as |
| A. | Contra asset revenue |
| B. | Accrued expenses |
| C. | Accrued revenue |
| D. | Unearned revenue |
| Answer» D. Unearned revenue | |
| 27. |
Prepaid expenses are considered as |
| A. | Asset |
| B. | Liability |
| C. | Loss |
| D. | Capital |
| Answer» B. Liability | |
| 28. |
_______ are cheques that are issued by the business but not yet presented to bank for payment |
| A. | Uncollected cheques |
| B. | Uncredited cheques |
| C. | Outstanding cheques |
| D. | Bounced cheques |
| Answer» D. Bounced cheques | |
| 29. |
Unpresented cheques are also referred to as |
| A. | Uncollected cheques |
| B. | Uncredited cheques |
| C. | Outstanding cheques |
| D. | Bounced cheques |
| Answer» D. Bounced cheques | |
| 30. |
Bank Reconciliation statement is prepared by |
| A. | Accountant of business |
| B. | Manager of business |
| C. | Controller of business |
| D. | Accountant of the bank |
| Answer» B. Manager of business | |
| 31. |
Favourable balance of cash book implies |
| A. | Credit balance of cash book |
| B. | Debit balance of cash book |
| C. | Bank overdraft |
| D. | Adjusted balance of cash book |
| Answer» C. Bank overdraft | |
| 32. |
A cash deposit made by business appears on the bank statement as ____ balance |
| A. | Debit |
| B. | Credit |
| C. | Expenses |
| D. | Liability |
| Answer» C. Expenses | |
| 33. |
A credit balance in cash book indicates |
| A. | Bank balance |
| B. | Cash at bank |
| C. | Bank overdraft |
| D. | Bank underdraft |
| Answer» D. Bank underdraft | |
| 34. |
Postdated cheques are considered as |
| A. | Cash |
| B. | Bank balance |
| C. | Accounts receivable |
| D. | Cash reserve |
| Answer» D. Cash reserve | |
| 35. |
Purchase of office equipment for cash will be recorded on which side of a cash book? |
| A. | Receipts |
| B. | Payments |
| C. | Incomes |
| D. | Expenditures |
| Answer» C. Incomes | |
| 36. |
A cash book that is used to record the small payments of cash is generally referred to as |
| A. | Simple cash book |
| B. | Two columns cash book |
| C. | Three columns cash book |
| D. | Petty cash book |
| Answer» E. | |
| 37. |
Drawings by owner of business are generally recorded on which of the following side of a cash book? |
| A. | Receipts |
| B. | Payments |
| C. | Incomes |
| D. | Expenditures |
| Answer» C. Incomes | |
| 38. |
Discount received is recorded on which of the following side of a cash book? |
| A. | Receipts |
| B. | Payments |
| C. | Income |
| D. | Expenditure |
| Answer» C. Income | |
| 39. |
The most common imprest system is the ______ system |
| A. | Petty cash |
| B. | Cash book |
| C. | Cash receipts journal |
| D. | Discount |
| Answer» B. Cash book | |
| 40. |
A cash book with cash, bank and discount column is commonly referrred to as |
| A. | Cash book |
| B. | Two columns cash book |
| C. | Three columns cash book |
| D. | Petty cash book |
| Answer» D. Petty cash book | |
| 41. |
Cash book records |
| A. | Cash payments |
| B. | Cash Receipts |
| C. | Cash payments and cash receipts |
| D. | Neither cash payments nor cash receipts |
| Answer» D. Neither cash payments nor cash receipts | |
| 42. |
An entry which is made on both sides of a cash book is called |
| A. | Cash entry |
| B. | Contra entry |
| C. | Payment entry |
| D. | Compound entry |
| Answer» C. Payment entry | |
| 43. |
Payment of rent expenses is recorded on which side of cash book? |
| A. | Receipts |
| B. | Payments |
| C. | Income |
| D. | Expense |
| Answer» C. Income | |
| 44. |
Which of the following account with normal balance is shown at the credit side of a trial balance? |
| A. | Cash account |
| B. | Bank account |
| C. | Equipment account |
| D. | Accrued expenses account |
| Answer» E. | |
| 45. |
If debit balances = credit balances, trial balance only shows or checks the _________ and it does not indicate that no errors were made during recording and posting. |
| A. | Arithmetic accuracy |
| B. | Errors of commission |
| C. | Omissions of economic events |
| D. | Understatements of balances |
| Answer» B. Errors of commission | |
| 46. |
Which of the following account with normal balance is shown at the debit side of a trial balance? |
| A. | Rent income account |
| B. | Creditors account |
| C. | Unearned income account |
| D. | Cash account |
| Answer» E. | |
| 47. |
Which of the following will affect the agreement of a trial balance? |
| A. | Complete omission of a transaction |
| B. | Partial omission of a transaction |
| C. | Error of principle |
| D. | Compensating errors |
| Answer» C. Error of principle | |
| 48. |
Debit balance = Credit balance in a trial balance indicates that |
| A. | No error in recording transactions |
| B. | No error in posting entries to ledger accounts |
| C. | Account balances are correct |
| D. | Mathematically Capital + Liabilities = Assets |
| Answer» E. | |
| 49. |
Which of the following is true about a trial balance? |
| A. | It lists down the balances of accounts |
| B. | It lists down the balances of a balance sheet |
| C. | It is a kind of financial statement |
| D. | It is not a part of accounting cycle |
| Answer» B. It lists down the balances of a balance sheet | |
| 50. |
_______ is the common base for preparing a trial balance |
| A. | Ledger accounts |
| B. | General Journal |
| C. | Specialized journals |
| D. | Balance sheet |
| Answer» B. General Journal | |