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. |
%_Sales and purchase journal doesn't record_% |
| A. | Credit sales |
| B. | Credit purchases |
| C. | Credit sales and purchases |
| D. | Cash sales and purchases |
| Answer» E. | |
| 2. |
%_Discount for quick repayment of debt is normally referred to as_% |
| A. | Trade discount |
| B. | Prompt payment discount |
| C. | Cash discount |
| D. | Bulk discount |
| Answer» D. Bulk discount | |
| 3. |
%_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 | |
| 4. |
%_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 | |
| 5. |
%_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 | |
| 6. |
%_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 | |
| 7. |
%_Which of the following is the external user of financial statements?_% |
| A. | Manager of the business |
| B. | CEO of the business |
| C. | Creditor of the business |
| D. | Controller of the business |
| Answer» D. Controller of the business | |
| 8. |
%_The accounting process involves recording_% |
| A. | Quantifiable economic event |
| B. | Non Quantifiable economic event |
| C. | All of them |
| D. | None of them |
| Answer» B. Non Quantifiable economic event | |
| 9. |
%_Which of the following is a liability?_% |
| A. | Cash |
| B. | Equipment |
| C. | Debtors |
| D. | Creditors |
| Answer» E. | |
| 10. |
%_Liabilities are which of the following?_% |
| A. | Resources |
| B. | Obligations |
| C. | Future benefits |
| D. | Expenses |
| Answer» C. Future benefits | |
| 11. |
%_The following is a statement of revenues and expenses for a specific period of time_% |
| A. | Trading account |
| B. | Trial Balance |
| C. | Profit & Loss statements |
| D. | Balance Sheet |
| Answer» D. Balance Sheet | |
| 12. |
%_Real account records_% |
| A. | Dealings with creditors or debtors |
| B. | Dealings in commodities |
| C. | Gains and losses |
| D. | All of the above |
| Answer» C. Gains and losses | |
| 13. |
%_Return on Investment Ratio (ROI) =_% |
| A. | (Gross profit / Net sales) x 100 |
| B. | (Gross profit x Sales / Fixed assets) x 100 |
| C. | (Net profit / Sales) x 100 |
| D. | (Net profit / Total assets) x 100 |
| Answer» E. | |
| 14. |
%_The following is (are) the current liability (ies)_% |
| A. | Bills payable |
| B. | Outstanding expenses |
| C. | Bank Overdraft |
| D. | All of the above |
| Answer» E. | |
| 15. |
%_Net income equal to Revenues minus_% |
| A. | Gains |
| B. | Depreciation |
| C. | Expenses |
| D. | Capital expenditure |
| Answer» D. Capital expenditure | |
| 16. |
%_The process of recording in Journal is done_% |
| A. | Two times in a year |
| B. | Once in a year |
| C. | Frequently during the accounting period |
| D. | At the end of an accounting period |
| Answer» D. At the end of an accounting period | |
| 17. |
%_Double entry implies that_% |
| A. | Recording entries in Journal |
| B. | Recording entries in Ledger account |
| C. | Recording two aspects of every transaction |
| D. | Recording every transaction in books |
| Answer» D. Recording every transaction in books | |
| 18. |
%_The other name of Journal is_% |
| A. | Ledger |
| B. | T account |
| C. | Day Book |
| D. | Cash Book |
| Answer» D. Cash Book | |
| 19. |
%_Which of the following accounts will be debited if the business's owner withdraws cash from business for personal use?_% |
| A. | Drawings |
| B. | Cash |
| C. | Business |
| D. | Stock |
| Answer» B. Cash | |
| 20. |
_ The left side of an account is known as ___ and the right side as ____$? |
| A. | Debit, Credit |
| B. | Credit, Debit |
| C. | Liability, Asset |
| D. | None of the above |
| Answer» B. Credit, Debit | |
| 21. |
_ A bill of exchange is called a ____ by one who is liable to pay it on the due date$? |
| A. | Bill receivable |
| B. | Noted bill of exchange |
| C. | Bill payable |
| D. | None of the above |
| Answer» D. None of the above | |
| 22. |
_ "Treating a revenue expenditure as a capital expenditure" is an example of$? |
| A. | Compensating error |
| B. | Error of principle |
| C. | Error of omission |
| D. | Error of commission |
| Answer» C. Error of omission | |
| 23. |
_ Revenue earned but not yet received by the business is known as$? |
| A. | Contra asset revenue |
| B. | Accrued expenses |
| C. | Accrued revenue |
| D. | Unearned revenue |
| Answer» D. Unearned revenue | |
| 24. |
_ Unpresented cheques are also referred to as$? |
| A. | Uncollected cheques |
| B. | Uncredited cheques |
| C. | Outstanding cheques |
| D. | Bounced cheques |
| Answer» D. Bounced cheques | |
| 25. |
_ Favourable balance of cash book implies$? |
| 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 | |
| 26. |
_ Purchase of office equipment for cash will be recorded on which side of a cash book?$? |
| A. | Receipts |
| B. | Payments |
| C. | Incomes |
| D. | Expenditures |
| Answer» C. Incomes | |
| 27. |
_ Discount received is recorded on which of the following side of a cash book?$? |
| A. | Receipts |
| B. | Payments |
| C. | Income |
| D. | Expenditure |
| Answer» C. Income | |
| 28. |
_ A firm has not recorded the bad debts by mistake. Which of the following is the effect of bad debt ommission?$? |
| A. | Net profit would decrease |
| B. | Net profit would increase |
| C. | Gross profit would overstate |
| D. | Gross profit would understate |
| Answer» C. Gross profit would overstate | |
| 29. |
_ When a liability is reduced or decreased, it is recorded on the:$? |
| 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. | |
| 30. |
_ An overstatement in the value of closing stock overstates all of the following except$? |
| A. | Net income |
| B. | Current assets |
| C. | Capital of the business |
| D. | Cost of goods sold |
| Answer» E. | |
| 31. |
_ Which counting concept dictates the inclusion of 'provision for doubtful debts' in the financial statements?$? |
| A. | Accrual concept |
| B. | Matching concept |
| C. | Going concern concept |
| D. | Prudence concept |
| Answer» E. | |
| 32. |
_ What is depreciation?$? |
| A. | Cost of a fixed asset |
| B. | Cost of a fixed asset's repair |
| C. | The residual value of a fixed asset |
| D. | Portion of a fixed asset's cost consumed during the current accounting period |
| Answer» E. | |
| 33. |
_ Goodwill is classified as which one of the following assets?$? |
| A. | Fixed |
| B. | Long term |
| C. | Current |
| D. | Intangible |
| Answer» E. | |
| 34. |
_ Purchases + opening stock - closing stock = ?$? |
| A. | Amount of sales |
| B. | Gross profit |
| C. | Cost of goods sold |
| D. | Net income |
| Answer» D. Net income | |
| 35. |
_ Under which method of depreciation, the amount of depreciation expenses remains constant throughout the life of the asset?$? |
| A. | Reducing balance method |
| B. | Unit of activity method |
| C. | Straight line method |
| D. | None of these |
| Answer» D. None of these | |
| 36. |
_ Depreciation is charged on fixed assets to comply with which of the following accounting principle?$? |
| A. | Matching concept |
| B. | Prudence concept |
| C. | Timeliness concept |
| D. | Reliability concept |
| Answer» B. Prudence concept | |
| 37. |
_ Which of the following is time spann into which the total life of a business is divided for the purpose of preparing financial statements?$? |
| A. | Fiscal year |
| B. | Calendar year |
| C. | Accounting period |
| D. | Accrual period |
| Answer» D. Accrual period | |
| 38. |
_ Patents, Copyrights and Trademarks are$? |
| A. | Current assets |
| B. | Fixed assets |
| C. | Intangible assets |
| D. | Investments |
| Answer» D. Investments | |
| 39. |
_ Under diminishing balance method, depreciation$? |
| A. | Is constant every year |
| B. | Increases every year |
| C. | Decreases every year |
| D. | None of the above |
| Answer» D. None of the above | |
| 40. |
_ In case of opening Credit Balance, the word ______ are written on the credit side.$? |
| A. | By Balance b/d |
| B. | To Balance b/d |
| C. | By Balance c/d |
| D. | To Balance c/d |
| Answer» B. To Balance b/d | |
| 41. |
_ Petty cash is used for payment of$? |
| 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 | |
| 42. |
_ Which of the following enhances the earning capacity of an asset?$? |
| A. | Reduction in operating costs |
| B. | Increase in working capacity of an asset |
| C. | Replacing damage parts of an asset |
| D. | Both 'b' and 'c' |
| Answer» E. | |
| 43. |
_ Which account is the odd one out?$? |
| A. | Office furniture and equipment |
| B. | Freehold land and building |
| C. | Stock of raw materials |
| D. | Plant and machinery |
| Answer» D. Plant and machinery | |
| 44. |
_ The party who sends the goods for sales on fixed commission basis is known as$? |
| A. | Drawer |
| B. | Drawee |
| C. | Payee |
| D. | Consignor |
| Answer» E. | |
| 45. |
_ Municipal tax Rs.6000 under dispute is a$? |
| A. | Contingent liability |
| B. | Revenue expenditure |
| C. | Current liability |
| D. | Current asset |
| Answer» B. Revenue expenditure | |
| 46. |
_ Different accounting policies can be adopted in the following area(s)$? |
| A. | Valuation of inventories |
| B. | Valuation of Investments |
| C. | Calculation of depreciation |
| D. | All of the above |
| Answer» E. | |
| 47. |
_ When obligation is not probable or the amount expected to be paid to settle the liability cannot be measured with sufficient reliability, it is called$? |
| A. | Contingent liability |
| B. | Provision |
| C. | Secured loan |
| D. | None of the above |
| Answer» B. Provision | |
| 48. |
_ A proforma invoice is sent by$? |
| A. | Consignee to consignor |
| B. | Consignee to debtors |
| C. | Debtors to consignee |
| D. | Consignor to consignee |
| Answer» E. | |
| 49. |
_ Transaction between business and owner are recorded following ____ concept$? |
| A. | Periodicity |
| B. | Business entity |
| C. | Prudence |
| D. | Going concern |
| Answer» C. Prudence | |
| 50. |
_ 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. | |