2081 + Mcqs in Accounting Page 36 McqOptions

1751.	____ principle requires that the same accounting method should be used from one accounting period to the next
A.	Conservatism
B.	Consistency
C.	Business entity
D.	Money measurement
Answer» C. Business entity

Discussion

1752.	If an effect of an error is cancelled by the effect of some other error, it is commonly known as
A.	Error of principle
B.	Compensatory errors
C.	Error of omission
D.	Error of commission
Answer» C. Error of omission

Discussion

1753.	"Treating a revenue expenditure as a capital expenditure" is an example of
A.	Compensating error
B.	Error of principle
C.	Error of omission
D.	Error of commission
Answer» C. Error of omission

Discussion

1754.	Narrations are given at the end of
A.	Final accounts
B.	Trial Balance
C.	Each Ledger account
D.	Each journal entry
Answer» E.

Discussion

1755.	The basic consideration(s) in distinction between capital and revenue expenditure is/are
A.	Nature of business
B.	Effect on revenue generating capacity of the business
C.	Purpose of expenses
D.	All of the above
Answer» E.

Discussion

1756.	X draws a bill on Y. X endorsed the bill to Z. ____ will be the payee of the bill.
A.	x
B.	y
C.	z
D.	None of the above
Answer» D. None of the above

Discussion

1757.	Which account is the odd one out?
A.	Office furniture and equipment
B.	Freehold land and building
C.	Stock of raw materials
D.	Plant and machinery
Answer» D. Plant and machinery

Discussion

1758.	The owner of consignment stock is
A.	Consignor
B.	Consignee
C.	Debtors
D.	None of the above
Answer» B. Consignee

Discussion

1759.	Endorsement, discounting and collection of bills of exchange is made by
A.	Debtors
B.	Creditors
C.	Drawee
D.	Drawer
Answer» E.

Discussion

1760.	Bills receivable is a
A.	Intangible fixed asset
B.	Tangible fixed asset
C.	Current asset
D.	Investment
Answer» D. Investment

Discussion

1761.	The party who sends the goods for sales on fixed commission basis is known as
A.	Drawer
B.	Drawee
C.	Payee
D.	Consignor
Answer» E.

Discussion

1762.	Joint venture account is a
A.	Nominal account
B.	Personal account
C.	Real account
D.	Dummy account
Answer» B. Personal account

Discussion

1763.	Municipal tax Rs.6000 under dispute is a
A.	Contingent liability
B.	Revenue expenditure
C.	Current liability
D.	Current asset
Answer» B. Revenue expenditure

Discussion

1764.	Difference of total of debit and credit side of the trial balance is transferred to
A.	Suspense A/c
B.	Difference A/c
C.	P & L A/c
D.	Trading A/c
Answer» B. Difference A/c

Discussion

1765.	Legal expenses incurred on a suit for breach of contract to supply goods is a
A.	Capital expenditure
B.	Deferred Revenue expenditure
C.	Revenue expenditure
D.	Both 'b' and 'c'
Answer» D. Both 'b' and 'c'

Discussion

1766.	Under diminishing balance method, depreciation
A.	Is constant every year
B.	Increases every year
C.	Decreases every year
D.	None of the above
Answer» D. None of the above

Discussion

1767.	The parties to joint venture are called
A.	Friends
B.	Principal and agent
C.	Partners
D.	Co-ventures
Answer» E.

Discussion

1768.	Heavy amount spent for the advertisement of new company product is
A.	Revenue expenditure
B.	Deferred Revenue expenditure
C.	Capital expenditure
D.	Either 'a' or 'c'
Answer» C. Capital expenditure

Discussion

1769.	Cash Account is
A.	Personal account
B.	Real account
C.	Nominal account
D.	None of the above
Answer» C. Nominal account

Discussion

1770.	Income includes
A.	Income earned
B.	Income received
C.	Income receivable
D.	All of the above
Answer» E.

Discussion

1771.	The following error will affect the Trial Balance
A.	Error of partial omission
B.	Error of principle
C.	Error of complete omission
D.	All of the above
Answer» B. Error of principle

Discussion

1772.	A company cannot issue redeemable preference shares for a period exceeding
A.	10 years
B.	20 years
C.	30 years
D.	15 years
Answer» C. 30 years

Discussion

1773.	In case of opening Credit Balance, the word ______ are written on the credit side.`
A.	By Balance b/d
B.	To Balance b/d
C.	By Balance c/d
D.	To Balance c/d
Answer» B. To Balance b/d

Discussion

1774.	Preliminary expenses are treated as
A.	Fixed asstes
B.	Current assets
C.	Intangible assets
D.	Miscellaneous expenditure
Answer» E.

Discussion

1775.	Revenue expenditures are recorded in the
A.	Manufacturing account
B.	Trading account
C.	Profit & loss account
D.	All of the above
Answer» E.

Discussion

1776.	Promissory note is prepared by
A.	Drawer
B.	Endorsee
C.	Drawee
D.	All of the above
Answer» D. All of the above

Discussion

1777.	Petty cash is used for payment of
A.	Salaries & wages of the staff
B.	For purchase of assets
C.	Small expenses relating to postage's and conveyance etc.
D.	All of the above
Answer» D. All of the above

Discussion

1778.	Profit is a part of
A.	Income
B.	Owner's capital
C.	Assets
D.	All of the above
Answer» C. Assets

Discussion

1779.	Gross profit is equal to
A.	Opening stock + purchases - closing stock
B.	Net profit - expenses
C.	Sales - Closing stock + purchases
D.	Sales - Cost of goods sold
Answer» E.

Discussion

1780.	Which of the following enhances the earning capacity of an asset?
A.	Reduction in operating costs
B.	Increase in working capacity of an asset
C.	Replacing damage parts of an asset
D.	Both 'b' and 'c'
Answer» E.

Discussion

1781.	Profit & Loss account is prepared for a period of one year by following
A.	Periodicity concept
B.	Business entity concept
C.	Accrual concept
D.	None of the above
Answer» B. Business entity concept

Discussion

1782.	Rs.5000 spent on maintenance of computer is
A.	Deferred capital expenditure
B.	Capital expenditure
C.	Revenue expenditure
D.	None of the above
Answer» D. None of the above

Discussion

1783.	Parties to a bill of exchange are
A.	Drawer
B.	Drawee
C.	Payee
D.	All of the above
Answer» E.

Discussion

1784.	Accommodation bill is drawn
A.	To finance actual purchase or sale of goods
B.	To facilitate trade transmission
C.	To cater the fund requirements of both the parties
D.	None of the above
Answer» D. None of the above

Discussion

1785.	Which error cannot be revealed on the preparation of trial balance?
A.	Wrong totalling of account
B.	Compensatory errors
C.	Error of commission
D.	Wrong balancing of an account
Answer» C. Error of commission

Discussion

1786.	Commission to promote credit sale by consignee is known as
A.	Del credere commission
B.	Over riding commission
C.	Ordinary commission
D.	Special commission
Answer» B. Over riding commission

Discussion

1787.	Dividends are usually paid as a percentage of
A.	Net profit
B.	Authorized share capital
C.	Called up capital
D.	Paid up capital
Answer» E.

Discussion

1788.	A proforma invoice is sent by
A.	Consignee to consignor
B.	Consignee to debtors
C.	Debtors to consignee
D.	Consignor to consignee
Answer» E.

Discussion

1789.	One of the Fundamental accounting assumption is
A.	Materiality
B.	Going concern
C.	Business entity
D.	Dual aspect
Answer» C. Business entity

Discussion

1790.	Loss leads to reduction in
A.	Capital
B.	Income
C.	Liabilities
D.	None of the above
Answer» B. Income

Discussion

1791.	Transaction between business and owner are recorded following ____ concept
A.	Periodicity
B.	Business entity
C.	Prudence
D.	Going concern
Answer» C. Prudence

Discussion

1792.	When will the bill mature if the date of maturity of a bill is a holiday
A.	Holiday itself
B.	Other agreed day
C.	Preceding working day
D.	Next working day
Answer» D. Next working day

Discussion

1793.	Revenue from sale of product ordinarily is reported as part of earning in the period
A.	The planning takes place
B.	The sale is made
C.	The product is manufactured
D.	The cash is collected
Answer» C. The product is manufactured

Discussion

1794.	Reserve capital means
A.	Part of subscribed uncalled capital
B.	Accumulated profit
C.	Part of Capital Reserve
D.	Part of Capital Redemption Reserve
Answer» B. Accumulated profit

Discussion

1795.	Del-credere Commission is allowed to cover
A.	All types losses
B.	Abnormal loss
C.	Normal loss
D.	None of the above
Answer» E.

Discussion

1796.	Interest on Capital is _____ for the business
A.	Revenue
B.	Expense
C.	Gain
D.	None of the above
Answer» C. Gain

Discussion

1797.	Accounts payable has ____ balance
A.	Credit
B.	Debit
C.	Unfavorable
D.	Favorable
Answer» B. Debit

Discussion

1798.	Economic life of an enterprise Is split into periodic interval as per ____ concept
A.	Materiality
B.	Periodicity
C.	Accrual
D.	Conservation
Answer» C. Accrual

Discussion

1799.	Present liability of uncertain amount, which can be measured reliably by using a substantial degree of estimation is termed as
A.	Contingent liability
B.	Liability
C.	Provision
D.	Reserve
Answer» D. Reserve

Discussion

1800.	Overriding commission is generally calculated on
A.	Cash sale only
B.	Total sales exceeding invoice value/cost
C.	Credit sales
D.	None of the above
Answer» C. Credit sales

Discussion

Explore topic-wise MCQs in Finance & Accounting.

____ principle requires that the same accounting method should be used from one accounting period to the next

If an effect of an error is cancelled by the effect of some other error, it is commonly known as

"Treating a revenue expenditure as a capital expenditure" is an example of

Narrations are given at the end of

The basic consideration(s) in distinction between capital and revenue expenditure is/are

X draws a bill on Y. X endorsed the bill to Z. ____ will be the payee of the bill.

Which account is the odd one out?

The owner of consignment stock is

Endorsement, discounting and collection of bills of exchange is made by

Bills receivable is a

The party who sends the goods for sales on fixed commission basis is known as

Joint venture account is a

Municipal tax Rs.6000 under dispute is a

Difference of total of debit and credit side of the trial balance is transferred to

Legal expenses incurred on a suit for breach of contract to supply goods is a

Under diminishing balance method, depreciation

The parties to joint venture are called

Heavy amount spent for the advertisement of new company product is

Cash Account is

Income includes

The following error will affect the Trial Balance

A company cannot issue redeemable preference shares for a period exceeding

In case of opening Credit Balance, the word ______ are written on the credit side.`

Preliminary expenses are treated as

Revenue expenditures are recorded in the

Promissory note is prepared by

Petty cash is used for payment of

Profit is a part of

Gross profit is equal to

Which of the following enhances the earning capacity of an asset?

Profit & Loss account is prepared for a period of one year by following

Rs.5000 spent on maintenance of computer is

Parties to a bill of exchange are

Accommodation bill is drawn

Which error cannot be revealed on the preparation of trial balance?

Commission to promote credit sale by consignee is known as

Dividends are usually paid as a percentage of

A proforma invoice is sent by

One of the Fundamental accounting assumption is

Loss leads to reduction in

Transaction between business and owner are recorded following ____ concept

When will the bill mature if the date of maturity of a bill is a holiday

Revenue from sale of product ordinarily is reported as part of earning in the period

Reserve capital means

Del-credere Commission is allowed to cover

Interest on Capital is _____ for the business

Accounts payable has ____ balance

Economic life of an enterprise Is split into periodic interval as per ____ concept

Present liability of uncertain amount, which can be measured reliably by using a substantial degree of estimation is termed as

Overriding commission is generally calculated on