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 one of the following is NOT true about revenue expenditure? |
| A. | These are the running expenses of the business |
| B. | They improve the financial position of the business |
| C. | They reduce the profit of the concern |
| D. | They do not appear in the balance sheet |
| Answer» C. They reduce the profit of the concern | |
| 2. |
The maximum amount with which a company is registered is called |
| A. | Authorized capital |
| B. | Issued capital |
| C. | Paid up capital |
| D. | Called up capital |
| Answer» B. Issued capital | |
| 3. |
Authorized share capital is also known as |
| A. | Registered capital |
| B. | Issued capital |
| C. | Paid up capital |
| D. | Called up capital |
| Answer» B. Issued capital | |
| 4. |
In which of the following condition, a company will have positive working capital? |
| A. | If current assets>current liabilities |
| B. | If current assets |
| C. | If current assets = current liabilities |
| D. | current liabilities |
| Answer» B. If current assets | |
| 5. |
Which of the following account will be credited in the books of XYZ Co. Ltd, if the business purchases a vehicle thriugh cheque? |
| A. | Vehicle account |
| B. | Business account |
| C. | Bank account |
| D. | Debtors account |
| Answer» D. Debtors account | |
| 6. |
Accounts receivable & inventory are the examples of |
| A. | Current assets |
| B. | Liquid asset |
| C. | Fixed asset |
| D. | Capital asset |
| Answer» B. Liquid asset | |
| 7. |
Which of the following capital is required for the registration of the company? |
| A. | Issued capital |
| B. | Subscribed capital |
| C. | Authorized capital |
| D. | Reserve capital |
| Answer» D. Reserve capital | |
| 8. |
Which of the following is quoted company? |
| A. | Private limited company |
| B. | Public limited company |
| C. | Listed company |
| D. | Non listed company |
| Answer» D. Non listed company | |
| 9. |
Which of the following is NOT a cash inflow? |
| A. | Sale of fixed asset |
| B. | Issue of debentures |
| C. | Cash from business operation |
| D. | Purchase of fixed asset |
| Answer» E. | |
| 10. |
In which of the following interim dividend is treated? |
| A. | In profit and loss account |
| B. | In profit and loss appropriation account |
| C. | On the asset side of the Balance sheet |
| D. | In trading account |
| Answer» C. On the asset side of the Balance sheet | |
| 11. |
Which of the following documents contains rules and regulations for internal management of the business? |
| A. | Memorandum of association |
| B. | Articles of association |
| C. | Prospectus |
| D. | Statutory Declaration |
| Answer» C. Prospectus | |
| 12. |
Which of the following can be distributed among the shareholders? |
| A. | Capital reserve |
| B. | General reservev |
| C. | Revaluation reserve |
| D. | All of the above |
| Answer» C. Revaluation reserve | |
| 13. |
Which of the following is non-profit organization? |
| A. | Sole proprietorship |
| B. | Partnership |
| C. | Limited company |
| D. | Trust |
| Answer» E. | |
| 14. |
Shares for which amount is paid by public are called ____ shares |
| A. | Authorized |
| B. | Paid up |
| C. | Bonus shares |
| D. | All of the above |
| Answer» C. Bonus shares | |
| 15. |
Merchandise on hand at either the beginning or end of the accounting period is called |
| A. | Raw material |
| B. | Cost of goods sold |
| C. | Work in progress |
| D. | Inventory |
| Answer» E. | |
| 16. |
Which of the following is (are) type(s) of Public Limited Companies? |
| A. | Listed companies |
| B. | Non listed companies |
| C. | Private limited companies |
| D. | Both listed and non listed companies |
| Answer» E. | |
| 17. |
The charter of a company which defines the limitations and powers of the company is called |
| A. | The memorandum of association |
| B. | Articles of association |
| C. | Statutory report |
| D. | Certificate of commencement |
| Answer» C. Statutory report | |
| 18. |
When one or both aspects of a transaction are recorded in the wrong class or category of account, it is called |
| A. | Error of principle |
| B. | Error of omission |
| C. | Error of commission |
| D. | Error of original entry |
| Answer» B. Error of omission | |
| 19. |
Which of the following item will be shown on debit side of debtors account? |
| A. | Discount received |
| B. | Return inwards |
| C. | Discount allowed |
| D. | Credit sales |
| Answer» E. | |
| 20. |
The allocation of the cost of a tangible plant asset to expense in the periods, in which services are received from the asset, is termed as |
| A. | Appreciation |
| B. | Depreciation |
| C. | Fluctuation |
| D. | None of the above |
| Answer» C. Fluctuation | |
| 21. |
The unfavorable balance of Profit and Loss account should be |
| A. | Added to liabilities |
| B. | Subtracted from current assets |
| C. | Subtracted from capital |
| D. | Subtracted from liabilities |
| Answer» D. Subtracted from liabilities | |
| 22. |
Which of the following account will be credited, if business bought goods on credit from Mr. Z? |
| A. | Purchases account |
| B. | Mr. Z account |
| C. | Cash account |
| D. | Sales account |
| Answer» C. Cash account | |
| 23. |
Which of the following is an example of business liability? |
| A. | Land |
| B. | Building |
| C. | Cash |
| D. | Creditors |
| Answer» E. | |
| 24. |
When capital is increased by an amount, it is recorded on the: |
| A. | Left or credit side of the account |
| B. | Right or debit side of the account |
| C. | Right or credit side of the account |
| D. | Left or debit side of the account |
| Answer» D. Left or debit side of the account | |
| 25. |
Which of the following is NOT an example of intangible assets? |
| A. | Franchise rights |
| B. | Goodwill |
| C. | Patents |
| D. | Land |
| Answer» E. | |
| 26. |
When a liability is reduced or decreased, it is recorded on the: |
| A. | Left or credit side of the account |
| B. | Right or debit side of the account |
| C. | Right or credit side of the account |
| D. | Left or debit side of the account |
| Answer» E. | |
| 27. |
Term 'Credit' means _____ by the business |
| A. | Receiving of benefits |
| B. | It has no effect on business |
| C. | Providing benefits |
| D. | It depends upon items |
| Answer» B. It has no effect on business | |
| 28. |
Cost of goods available for sale - closing inventory = ? |
| A. | Opening inventiry |
| B. | Cost of opening finished goods inventory |
| C. | Work in progress ending inventory |
| D. | Cost of goods sold |
| Answer» E. | |
| 29. |
Which one of the following methods of inventory costing produces ending stock cost close to the market value of the inventory? |
| A. | FIFO |
| B. | LIFO |
| C. | AVCO or averrage cost |
| D. | FIOL |
| Answer» B. LIFO | |
| 30. |
Opening inventory + Net purchases = ? |
| A. | Ending inventory |
| B. | Closing stock |
| C. | Cost of goods manufactured |
| D. | Cost of goods available for sale |
| Answer» E. | |
| 31. |
Which one of the following inventory costing methods is supposed to issue the most recently purchased goods? |
| A. | FIFO |
| B. | LIFO |
| C. | AVCO or averrage cost |
| D. | Moving average |
| Answer» C. AVCO or averrage cost | |
| 32. |
Which one of the following methods of inventory costing yields highest taxable income? |
| A. | FIFO |
| B. | LIFO |
| C. | AVCO or averrage cost |
| D. | Standard cost method |
| Answer» B. LIFO | |
| 33. |
All of the following are the methods of inventory costing except |
| A. | FIFO |
| B. | LIFO |
| C. | AVCO or average cost |
| D. | Stock take |
| Answer» E. | |
| 34. |
An overstatement in the value of closing stock overstates all of the following except |
| A. | Net income |
| B. | Current assets |
| C. | Capital of the business |
| D. | Cost of goods sold |
| Answer» E. | |
| 35. |
The value of inventories or stock is figured out at the lower of cost and |
| A. | Purchase price |
| B. | Opportunity cost |
| C. | Realizable value |
| D. | Net realizable value |
| Answer» E. | |
| 36. |
Which of the following is a commonly used base to create the provision for doubtful debts? |
| A. | Total purchases |
| B. | Total credit sales |
| C. | Total current assets |
| D. | Total current liabilities |
| Answer» C. Total current assets | |
| 37. |
Which counting concept dictates the inclusion of 'provision for doubtful debts' in the financial statements? |
| A. | Accrual concept |
| B. | Matching concept |
| C. | Going concern concept |
| D. | Prudence concept |
| Answer» E. | |
| 38. |
Which of the following is the most common cause of bad debt? |
| A. | Debtor refusal to repayment |
| B. | Debtor left the country |
| C. | Debtor committed a crime |
| D. | Debtor declared to be a bankrupt |
| Answer» E. | |
| 39. |
When it is certain that a debt won't be recovered. Which of the following is correct? |
| A. | Provision for bad debt is created |
| B. | Account receivable is credited |
| C. | Bad debts is credited |
| D. | Sales is debited |
| Answer» C. Bad debts is credited | |
| 40. |
A firm has not recorded the bad debts by mistake. Which of the following is the effect of bad debt ommission? |
| A. | Net profit would decrease |
| B. | Net profit would increase |
| C. | Gross profit would overstate |
| D. | Gross profit would understate |
| Answer» C. Gross profit would overstate | |
| 41. |
Which of the following is the effect on net income if a business decreases its provision for bad debts? |
| A. | It will increase net income |
| B. | It will decrease net income |
| C. | No effect |
| D. | It will increase gross profit and net income |
| Answer» B. It will decrease net income | |
| 42. |
An increase in the value of fixed asset is referred to as: |
| A. | Depreciation |
| B. | Appreciation |
| C. | Market capitalization |
| D. | Reverse depreciation |
| Answer» C. Market capitalization | |
| 43. |
Under which method of depreciation, the amount of depreciation expenses remains constant throughout the life of the asset? |
| A. | Reducing balance method |
| B. | Unit of activity method |
| C. | Straight line method |
| D. | None of these |
| Answer» D. None of these | |
| 44. |
In the calculation of depreciation, all of the following items are actually estimates except: |
| A. | Useful life |
| B. | Residual value |
| C. | Historical cost |
| D. | Salvage value |
| Answer» D. Salvage value | |
| 45. |
The purchase price of a software that will be used for more than 12 months should be regarded as |
| A. | a revenue expenditure |
| B. | a capital expenditure |
| C. | a long term expense |
| D. | an accounting period expense |
| Answer» C. a long term expense | |
| 46. |
Cost of a fixed asset - Accumulated depreciation expenses of the fixed asset = ? |
| A. | Book value of a fixed asset |
| B. | Market value of a fixed asset |
| C. | Historical cost of a fixed asset |
| D. | Recoverable amount if a fixed asset |
| Answer» B. Market value of a fixed asset | |
| 47. |
Depreciable amount + Residual value of a fixed asset = ? |
| A. | Depreciation expenses |
| B. | Accumulated depreciation |
| C. | Cost of the fixed asset |
| D. | Future economic benefits of a fixed asset |
| Answer» D. Future economic benefits of a fixed asset | |
| 48. |
In depreciation calculation, the useful life of a fixed asset is: |
| A. | a certain figure |
| B. | an estimate |
| C. | a predetermined figure for all fixed assets |
| D. | Both of them |
| Answer» C. a predetermined figure for all fixed assets | |
| 49. |
Which of the following is/are kind of depreciation expenses? |
| A. | Amortization |
| B. | Depletion |
| C. | Both of them |
| D. | no |
| Answer» D. no | |
| 50. |
An alternative term used for accumulated depreciation expenses? |
| A. | Provision for depreciation |
| B. | Cumulative depreciation |
| C. | Targeted depreciation |
| D. | Depletion |
| Answer» B. Cumulative depreciation | |