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. |
When obligation is not probable or the amount expected to be paid to settle the liability cannot be measured with sufficient reliability, it is called |
| A. | Contingent liability |
| B. | Provision |
| C. | Secured loan |
| D. | None of the above |
| Answer» B. Provision | |
| 2. |
A Trial Balance contains the balances of |
| A. | Only Real A/c |
| B. | Real A/c and Nominal A/c |
| C. | Personal A/c |
| D. | Both 'b' and 'c' |
| Answer» E. | |
| 3. |
The installation expenses for a new machinery will be debited to |
| A. | Cash A/c |
| B. | Profit & Loss A/c |
| C. | Machinery A/c |
| D. | Installation expenses A/c |
| Answer» D. Installation expenses A/c | |
| 4. |
Different accounting policies can be adopted in the following area(s) |
| A. | Valuation of inventories |
| B. | Valuation of Investments |
| C. | Calculation of depreciation |
| D. | All of the above |
| Answer» E. | |
| 5. |
Normally the following accounts are balanced |
| A. | Real account and Nominal account |
| B. | Personal account and Real account |
| C. | Only Nominal account |
| D. | All accounts |
| Answer» C. Only Nominal account | |
| 6. |
The accounting equation is based on |
| A. | Dual aspect |
| B. | Business entity |
| C. | Going concern concept |
| D. | All of the above |
| Answer» B. Business entity | |
| 7. |
The person from whom the goods are purchased on credit are called |
| A. | Debtors |
| B. | Creditors |
| C. | Accounts receivable |
| D. | None of the above |
| Answer» C. Accounts receivable | |
| 8. |
Those transactions for which there is no separate book, are recorded in the |
| A. | Cash book |
| B. | Bills receivable book |
| C. | Bills payable book |
| D. | Journal Proper |
| Answer» E. | |
| 9. |
A document sent to customer when he returns the goods is called |
| A. | Promissory note |
| B. | Invoice |
| C. | Credit note |
| D. | Debit note |
| Answer» D. Debit note | |
| 10. |
Which of the following event is subject matter of Accounting? |
| A. | Death of key executive of the business |
| B. | Strike of workers |
| C. | Payment of Rs.1000 to bank in discharge of outstanding loan |
| D. | Marriage of the daughter of the MD of the company |
| Answer» D. Marriage of the daughter of the MD of the company | |
| 11. |
Accounting is the process of matching |
| A. | Benefits and costs |
| B. | Revenues and costs |
| C. | Cash inflows and outflows |
| D. | Potential and real performance |
| Answer» C. Cash inflows and outflows | |
| 12. |
Which of the following subsidiary books serves the purpose of ledger too, in addition to the recording of accounting transaction? |
| A. | Purchases book |
| B. | Sales book |
| C. | Bills receivable book |
| D. | Cash Book |
| Answer» E. | |
| 13. |
Which of the following is not an item of revenue expenditure? |
| A. | Interest on deposits accepted |
| B. | Annual insurance premium on inventory |
| C. | Customs duty paid in connection with the import of equipment |
| D. | Repairs and maintenance on machinery |
| Answer» D. Repairs and maintenance on machinery | |
| 14. |
Which of the following is a real account? |
| A. | Salary account |
| B. | Cash account |
| C. | Outstanding rent account |
| D. | Sundry creditors account |
| Answer» C. Outstanding rent account | |
| 15. |
Right shares are the shares |
| A. | Issued by a newly formed company |
| B. | Legally issued to the public at large |
| C. | Offered to the existing equity shareholders |
| D. | That have a right of redemption |
| Answer» D. That have a right of redemption | |
| 16. |
The main objective of providing depreciation is to |
| A. | Calculate the true net profit |
| B. | Compute the actual cash profit |
| C. | Create funds for replacement of fixed assets |
| D. | Reduce tax burden |
| Answer» D. Reduce tax burden | |
| 17. |
Which of the following inventory valuation methods show higher profits during the period of rising prices? |
| A. | FIFO |
| B. | LIFO |
| C. | Weighted average cost method |
| D. | Simple average method |
| Answer» B. LIFO | |
| 18. |
Which of the following appears in the profit and loss appropriation account? |
| A. | Interest on debentures |
| B. | Dividend |
| C. | Provision for taxation |
| D. | Provision for bad debts |
| Answer» C. Provision for taxation | |
| 19. |
Which of the following is a leverage ratio? |
| A. | Debt equity ratio |
| B. | Current ratio |
| C. | Quick ratio |
| D. | Earning power |
| Answer» B. Current ratio | |
| 20. |
The trade discount on purchases is recorded ? |
| A. | When it is received |
| B. | When the inventory is purchased |
| C. | When the inventory is sold |
| D. | Not at all recorded in the books |
| Answer» E. | |
| 21. |
The trade discount on purchases is recorded |
| A. | When it is received |
| B. | When the inventory is purchased |
| C. | When the inventory is sold |
| D. | Not at all recorded in the books |
| Answer» E. | |
| 22. |
Under cash basis of accounting, revenue is recognized when |
| A. | Sale is made |
| B. | Cash is received |
| C. | Goods are delivered |
| D. | Services are rendered |
| Answer» C. Goods are delivered | |
| 23. |
Provision for bad debts is made as per the |
| A. | Conservatism concept |
| B. | Cost concept |
| C. | Consistency concept |
| D. | Going concern concept |
| Answer» B. Cost concept | |
| 24. |
Which of the following is not a financial statement? |
| A. | Profit and loss account |
| B. | Profit and loss appropriation account |
| C. | Balance sheet |
| D. | Trial Balance |
| Answer» E. | |
| 25. |
If the opening inventory of a business is undercast, it will |
| A. | Increase gross profit and decrease net profit |
| B. | Decrease gross profit as well as net profit |
| C. | Increase value of assets |
| D. | Increase gross profit as well as net profit |
| Answer» E. | |
| 26. |
Which of the following is not considered as Research & Development costs? |
| A. | Testing in search for product alternatives |
| B. | Legal work on patent application |
| C. | Modification of design of a process |
| D. | Searching for application of new research findings |
| Answer» C. Modification of design of a process | |
| 27. |
The maximum amount beyond which a company is not allowed to raise funds by issue of shares is |
| A. | Issued capital |
| B. | Reserve capital |
| C. | Nominal capital |
| D. | Subscribed capital |
| Answer» D. Subscribed capital | |
| 28. |
Based on which of the following concepts, is share capital account shown on the liability side of a balance sheet? |
| A. | Business entity concept |
| B. | Money measurement concept |
| C. | Cost concept |
| D. | Going concern concept |
| Answer» B. Money measurement concept | |
| 29. |
Which of the following ratios indicate the short-term liquidity of a business? |
| A. | Inventory turnover ratio |
| B. | Debt equity ratio |
| C. | Acid test ratio |
| D. | Proprietary ratio |
| Answer» D. Proprietary ratio | |
| 30. |
The accrual basis of accounting records revenues when they are |
| A. | Collected |
| B. | Earned |
| C. | Contracted |
| D. | Readily available for use |
| Answer» C. Contracted | |
| 31. |
In balance sheet, fixed assets are shown at |
| A. | Cost price |
| B. | Market value |
| C. | Fair value |
| D. | Written Down Value (WDV) |
| Answer» E. | |
| 32. |
A decrease in value of a fixed asset due to age, wear and tear is known as |
| A. | Depreciation |
| B. | Accumulated depreciation |
| C. | Appreciation |
| D. | Written Down Value (WDV) |
| Answer» B. Accumulated depreciation | |
| 33. |
An expenditure whose benefit is finished or enjoyed immediately is called |
| A. | Expense |
| B. | Liability |
| C. | Cost |
| D. | Income |
| Answer» B. Liability | |
| 34. |
Outsider's claim against the assets of the business is called |
| A. | Liability |
| B. | Expense |
| C. | Income |
| D. | Capital |
| Answer» B. Expense | |
| 35. |
A company's merchandise, raw materials, finished and unfinished products which have not yet been sold is known as |
| A. | Sales |
| B. | Purchases |
| C. | Inventory |
| D. | Work in progress |
| Answer» D. Work in progress | |
| 36. |
Which of the following assets are shown at written down value in Balance sheet? |
| A. | Current assets |
| B. | Liquid asset |
| C. | Floating assets |
| D. | Fixed asset |
| Answer» E. | |
| 37. |
Salaries paid in advance should be shown on |
| A. | Asset side of the Balance sheet |
| B. | Liability side of the Balance sheet |
| C. | Credit side of the Trading account |
| D. | All of the above |
| Answer» B. Liability side of the Balance sheet | |
| 38. |
Money spent to acquire or upgrade physical assets is known as |
| A. | Revenue expense |
| B. | Capital expense |
| C. | Administrative expense |
| D. | Operating expense |
| Answer» C. Administrative expense | |
| 39. |
In an account, when credit side total < debit side total, then, the balance is known as |
| A. | Negative balance |
| B. | Debit balance |
| C. | Positive balance |
| D. | Credit balance |
| Answer» C. Positive balance | |
| 40. |
Which of the following is not an item of Balance Sheet? |
| A. | Accounts receivable |
| B. | Accounts payable |
| C. | Sales revenue |
| D. | Marketable securities |
| Answer» D. Marketable securities | |
| 41. |
Which one of the following is NOT true about capital expenditure? |
| A. | Creates future benefits |
| B. | Incurred to acquire fixed assets |
| C. | Incurred to increase the economic life of existing fixed assets |
| D. | Reduce the profit of the concern |
| Answer» E. | |
| 42. |
The estimated value at which an asset is expected to be sold after the end of its useful life is called |
| A. | Residual value |
| B. | Salvage value |
| C. | Scrap value |
| D. | All of the above |
| Answer» E. | |
| 43. |
Which of the following financial statements show the financial health of an organisation at a stated point of time? |
| A. | Balance sheet |
| B. | Trading and Profit & Loss account |
| C. | Cash flow statement |
| D. | Statement of retained earnings |
| Answer» B. Trading and Profit & Loss account | |
| 44. |
Double entry accounting system includes |
| A. | Accrual accounting only |
| B. | Cash accounting only |
| C. | Both cash and accrual accounting |
| D. | None of the above |
| Answer» D. None of the above | |
| 45. |
An informal accounting statement that lists the ledger account balances at a point of time and compares the total of debit balances with the total of credit balances is known as |
| A. | Income statement |
| B. | Balance sheet |
| C. | Trial balance |
| D. | Cash Book |
| Answer» D. Cash Book | |
| 46. |
Which of the following account will be credited when the goods are purchased on credit from Mr. Ali? |
| A. | Purchases account |
| B. | Mr. Ali account |
| C. | Cash account |
| D. | Sales account |
| Answer» C. Cash account | |
| 47. |
Which of the following account will be credited when the goods are purchased on cash? |
| A. | Stock account |
| B. | Cash account |
| C. | Supplier account |
| D. | Work in progress account |
| Answer» C. Supplier account | |
| 48. |
General office expenses are charged to which of the following head? |
| A. | Administrative expenses |
| B. | Marketing expenses |
| C. | Selling expenses |
| D. | Financial expenses |
| Answer» B. Marketing expenses | |
| 49. |
Which of the following are the owners of a company? |
| A. | Proprietors |
| B. | Partners |
| C. | Shareholders |
| D. | Managers |
| Answer» D. Managers | |
| 50. |
The persons who sign Articles ans Memorandum of the company and contribute in the initial share capital of the company are called |
| A. | Subscribers |
| B. | Shareholders |
| C. | Managers |
| D. | Directors |
| Answer» B. Shareholders | |