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 ratios indicate the short-term liquidity of a business?$? |
| A. | Inventory turnover ratio |
| B. | Debt equity ratio |
| C. | Acid test ratio |
| D. | Proprietary ratio |
| Answer» D. Proprietary ratio | |
| 2. |
Which error cannot be revealed on the preparation of trial balance?$? |
| A. | Wrong totalling of account |
| B. | Compensatory errors |
| C. | Error of commission |
| D. | Wrong balancing of an account |
| Answer» C. Error of commission | |
| 3. |
Budgeting is difficult to apply in the following cases$? |
| A. | Products subjected to rapid changes |
| B. | Job order manufacturing |
| C. | Uncertain market condition |
| D. | All of the above |
| Answer» E. | |
| 4. |
Lower the Debt Equity ratio$? |
| A. | Lower the protection to creditors |
| B. | Higher the protection to creditors |
| C. | It does not affect the creditors |
| D. | None of the above |
| Answer» C. It does not affect the creditors | |
| 5. |
______ is a separate legal entity whose total capital can be divided into many shares$? |
| A. | Partnership |
| B. | Sole Proprietorship |
| C. | Company |
| D. | Non-profit organization |
| Answer» D. Non-profit organization | |
| 6. |
Bookkeeping mainly consists of which part of accounting process?$? |
| A. | Analysing |
| B. | Preparing financial statements |
| C. | Recording financial information |
| D. | Auditing the books of accounts |
| Answer» D. Auditing the books of accounts | |
| 7. |
Fresh capital introduction will increase$? |
| A. | Assets and Liabilities |
| B. | Assets and Equity |
| C. | Liabilities and equity and bank balance |
| D. | Capital and Liabilities |
| Answer» C. Liabilities and equity and bank balance | |
| 8. |
Every business transaction affects at least ____ accounts$? |
| A. | One |
| B. | Two |
| C. | Three |
| D. | Infinite |
| Answer» C. Three | |
| 9. |
Discount allowed is$? |
| A. | Expense of business |
| B. | Income of business |
| C. | Loss of business |
| D. | Abnormal loss of business |
| Answer» B. Income of business | |
| 10. |
______ is the withdrawal of cash and goods by the owner of the business for his/her personal use$? |
| A. | Depreciation |
| B. | Drawings |
| C. | Outflow of cash |
| D. | Appreciation |
| Answer» C. Outflow of cash | |
| 11. |
Capital increases if ______ increases$? |
| A. | Expenses are greater than income |
| B. | Drawings |
| C. | Interest on capital |
| D. | Revenue |
| Answer» E. | |
| 12. |
Any return evidence in support of a business transaction is called$? |
| A. | Journal |
| B. | Ledger |
| C. | Ledger posting |
| D. | Voucher |
| Answer» E. | |
| 13. |
The ratios that refer to the ability of the firm to meet the short term obligations out of its short term resources$? |
| A. | Liquidity ratio |
| B. | Leverage ratio |
| C. | Activity ratio |
| D. | Profitability ratio |
| Answer» B. Leverage ratio | |
| 14. |
The process of entering all transactions from the Journal to Ledger is called$? |
| A. | Posting |
| B. | Entry |
| C. | Accounting |
| D. | None of the above |
| Answer» B. Entry | |
| 15. |
Which is the most important characteristic that all assets of a business have?$? |
| A. | Long life of assets |
| B. | Value of assets |
| C. | Intangible nature of assets |
| D. | Future economic benefits |
| Answer» E. | |
| 16. |
Which of the following will affect the agreement of a trial balance?$? |
| A. | Complete omission of a transaction |
| B. | Partial omission of a transaction |
| C. | Error of principle |
| D. | Compensating errors |
| Answer» C. Error of principle | |
| 17. |
Payment of rent expenses is recorded on which side of cash book?$? |
| A. | Receipts |
| B. | Payments |
| C. | Income |
| D. | Expense |
| Answer» C. Income | |
| 18. |
Cash purchases is recorded in which of the following specialized journals?$? |
| A. | Purchase Journal |
| B. | Sales Journal |
| C. | Purchase return journal |
| D. | Cash payments journal |
| Answer» E. | |
| 19. |
Transferring entries from journal to ;edger account is commonly known as$? |
| A. | Recording |
| B. | Transferring |
| C. | Posting |
| D. | Entry making |
| Answer» D. Entry making | |
| 20. |
The normal balance of asset account is$? |
| A. | Credit balance |
| B. | Debit balance |
| C. | Cash balance |
| D. | Neither debit nor credit balance |
| Answer» C. Cash balance | |
| 21. |
Office equipment's account is classified as$? |
| A. | Nominal accounts |
| B. | Real account |
| C. | Cash account |
| D. | Capital account |
| Answer» C. Cash account | |
| 22. |
Transactions that a business does not record in any specialized journal are recorded in which of the following books?$? |
| A. | Cash payment journal |
| B. | Cash receipt journal |
| C. | Purchases return journal |
| D. | General journal |
| Answer» E. | |
| 23. |
In which of the following order, data is entered into the Journal?? |
| A. | Alphabetical order |
| B. | Numeric order |
| C. | Bullets order |
| D. | Chronological order |
| Answer» E. | |
| 24. |
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. | |
| 25. |
Which of the following is NOT an example of intangible assets?? |
| A. | Franchise rights |
| B. | Goodwill |
| C. | Patents |
| D. | Land |
| Answer» E. | |
| 26. |
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 | |
| 27. |
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 | |
| 28. |
Bookkeeping mainly consists of which part of accounting process?? |
| A. | Analysing |
| B. | Preparing financial statements |
| C. | Recording financial information |
| D. | Auditing the books of accounts |
| Answer» D. Auditing the books of accounts | |
| 29. |
Budgeting is difficult to apply in the following cases? |
| A. | Products subjected to rapid changes |
| B. | Job order manufacturing |
| C. | Uncertain market condition |
| D. | All of the above |
| Answer» E. | |
| 30. |
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 |
| Answer» E. | |
| 31. |
______ is a separate legal entity whose total capital can be divided into many shares? |
| A. | Partnership |
| B. | Sole Proprietorship |
| C. | Company |
| D. | Non-profit organization |
| Answer» D. Non-profit organization | |
| 32. |
The process of entering all transactions from the Journal to Ledger is called? |
| A. | Posting |
| B. | Entry |
| C. | Accounting |
| D. | None of the above |
| Answer» B. Entry | |
| 33. |
Any return evidence in support of a business transaction is called? |
| A. | Journal |
| B. | Ledger |
| C. | Ledger posting |
| D. | Voucher |
| Answer» E. | |
| 34. |
Lower the Debt Equity ratio? |
| A. | Lower the protection to creditors |
| B. | Higher the protection to creditors |
| C. | It does not affect the creditors |
| D. | None of the above |
| Answer» C. It does not affect the creditors | |
| 35. |
The ratios that refer to the ability of the firm to meet the short term obligations out of its short term resources? |
| A. | Liquidity ratio |
| B. | Leverage ratio |
| C. | Activity ratio |
| D. | Profitability ratio |
| Answer» B. Leverage ratio | |
| 36. |
Capital increases if ______ increases? |
| A. | Expenses are greater than income |
| B. | Drawings |
| C. | Interest on capital |
| D. | Revenue |
| Answer» E. | |
| 37. |
Fresh capital introduction will increase? |
| A. | Assets and Liabilities |
| B. | Assets and Equity |
| C. | Liabilities and equity and bank balance |
| D. | Capital and Liabilities |
| Answer» C. Liabilities and equity and bank balance | |
| 38. |
______ is the withdrawal of cash and goods by the owner of the business for his/her personal use? |
| A. | Depreciation |
| B. | Drawings |
| C. | Outflow of cash |
| D. | Appreciation |
| Answer» C. Outflow of cash | |
| 39. |
Every business transaction affects at least ____ accounts? |
| A. | One |
| B. | Two |
| C. | Three |
| D. | Infinite |
| Answer» C. Three | |
| 40. |
Discount allowed is? |
| A. | Expense of business |
| B. | Income of business |
| C. | Loss of business |
| D. | Abnormal loss of business |
| Answer» B. Income of business | |
| 41. |
A promissory note is drawn by ______ in favor of _____? |
| A. | Drawer, Drawee |
| B. | Maker, Payee |
| C. | Payer, Payee |
| D. | Drawer, Payee |
| Answer» C. Payer, Payee | |
| 42. |
Discounting of bill by the drawer is done with? |
| A. | Creditor |
| B. | Drawee |
| C. | Bank |
| D. | Notary public |
| Answer» D. Notary public | |
| 43. |
Narrations are given at the end of? |
| A. | Final accounts |
| B. | Trial Balance |
| C. | Each Ledger account |
| D. | Each journal entry |
| Answer» E. | |
| 44. |
A cheque returned by bank marked "NSF" means that |
| A. | Bank can't verify your identity |
| B. | There are not sufficient funds in your account |
| C. | Cheque has been forged |
| D. | Cheque can't be cashed being illegal |
| Answer» C. Cheque has been forged | |
| 45. |
Petty cash fund is supposed to be replenished |
| A. | Every year |
| B. | Every half year |
| C. | Every year |
| D. | At the end of every accounting period |
| Answer» E. | |
| 46. |
Cash book with cash and discount column is mostly referred to as |
| A. | Simple cash book |
| B. | Two columns cash book |
| C. | Three columns cash book |
| D. | Petty cash book |
| Answer» D. Petty cash book | |
| 47. |
Cash book is prepared by |
| A. | Bank |
| B. | Accountant of business |
| C. | Manager of a company |
| D. | Bank's cashier |
| Answer» C. Manager of a company | |
| 48. |
Which of the following is a biological asset? |
| A. | Land |
| B. | Building |
| C. | Environment |
| D. | Living plants and animals |
| Answer» E. | |
| 49. |
Under which method of inventory costing, a pre-determined cost is assigned to all items of inventory? |
| A. | Replacement cost method |
| B. | Standard cost method |
| C. | AVCO or average cost |
| D. | FIFO method |
| Answer» C. AVCO or average cost | |
| 50. |
Provision for cash discount on debtors is a percentage of |
| A. | Debtors |
| B. | Net debtors |
| C. | Net debtors less provision for doubtful debts |
| D. | Net sales |
| Answer» D. Net sales | |