MCQOPTIONS
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MCQOPTIONS
This section includes 2081 Mcqs, each offering curated multiple-choice questions to sharpen your Finance & Accounting knowledge and support exam preparation. Choose a topic below to get started.
| 2001. |
_______ is the gross inflow of economic benefits |
| A. | Assets |
| B. | Liabilities |
| C. | Income |
| D. | Expenses |
| Answer» D. Expenses | |
| 2002. |
Liabilities are which of the following? |
| A. | Resources |
| B. | Obligations |
| C. | Future benefits |
| D. | Expenses |
| Answer» C. Future benefits | |
| 2003. |
______ 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 | |
| 2004. |
An asset possesses which of the following? |
| A. | Future economic benefits for the business |
| B. | All kinds of benefits for the business |
| C. | Expenses for the business |
| D. | Merits & Demerits for the business |
| Answer» B. All kinds of benefits for the business | |
| 2005. |
Which of the following is the internal user of financial statements? |
| A. | Creditor of the business |
| B. | Government agency |
| C. | Shareholder of the business |
| D. | Manager of the business |
| Answer» E. | |
| 2006. |
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 | |
| 2007. |
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 | |
| 2008. |
Auditing refers to |
| A. | Reporting the financial information |
| B. | Examination of financial information |
| C. | Preparation of financial statements |
| D. | Maintaining the ledger accounts |
| Answer» C. Preparation of financial statements | |
| 2009. |
In accounting, an economic event is referred to as |
| A. | Cash |
| B. | Bank statement |
| C. | Transaction |
| D. | Exchange of money |
| Answer» D. Exchange of money | |
| 2010. |
A Master Budget consists of |
| A. | Sales budget |
| B. | Production budget |
| C. | Material budget |
| D. | All of the above |
| Answer» E. | |
| 2011. |
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 | |
| 2012. |
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. | |
| 2013. |
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. | |
| 2014. |
A low Return on Investment Ratio (ROI) indicates |
| A. | Improper utilization of resources |
| B. | Over investment in assets |
| C. | Both A and B |
| D. | None of the above |
| Answer» D. None of the above | |
| 2015. |
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 | |
| 2016. |
A higher inventory ratio indicates |
| A. | Better inventory management |
| B. | Quicker turnover |
| C. | Both A and B |
| D. | None of the above |
| Answer» D. None of the above | |
| 2017. |
The measure of how efficiently the assets resources are employed by the firm is called |
| A. | Liquidity ratio |
| B. | Leverage ratio |
| C. | Activity ratio |
| D. | Profitability ratio |
| Answer» D. Profitability ratio | |
| 2018. |
Current ratio = |
| A. | Quick assets/Current liabilities |
| B. | Current assets/Current liabilities |
| C. | Debt/Equity |
| D. | Current assets/Equity |
| Answer» C. Debt/Equity | |
| 2019. |
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 | |
| 2020. |
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 | |
| 2021. |
The following is (are) the current liability (ies) |
| A. | Bills payable |
| B. | Outstanding expenses |
| C. | Bank Overdraft |
| D. | All of the above |
| Answer» E. | |
| 2022. |
Balance sheet is a statement of |
| A. | Assets |
| B. | Liabilities |
| C. | Capital |
| D. | All of the above |
| Answer» E. | |
| 2023. |
The following is a statement showing the financial status of the comapany at any given time |
| A. | Trading account |
| B. | Profit & Loss statement |
| C. | Balance Sheet |
| D. | Cash Book |
| Answer» D. Cash Book | |
| 2024. |
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 | |
| 2025. |
In Journal, the business transaction is recorded |
| A. | Same day |
| B. | Next day |
| C. | Once in a week |
| D. | Once in a month |
| Answer» B. Next day | |
| 2026. |
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 | |
| 2027. |
The account that records expenses, gains and losses is |
| A. | Personal account |
| B. | Real account |
| C. | Nominal account |
| D. | None of the above |
| Answer» D. None of the above | |
| 2028. |
Any return evidence in support of a business transaction is called |
| A. | Journal |
| B. | Ledger |
| C. | Ledger posting |
| D. | Voucher |
| Answer» E. | |
| 2029. |
The debts which are to be repaid within a short period (year or less) are known as |
| A. | Current liabilities |
| B. | Fixed liabilities |
| C. | Contingent liabilities |
| D. | All of the above |
| Answer» B. Fixed liabilities | |
| 2030. |
Patents, Copyrights and Trademarks are |
| A. | Current assets |
| B. | Fixed assets |
| C. | Intangible assets |
| D. | Investments |
| Answer» D. Investments | |
| 2031. |
The assets that can be converted into cash within a short period (i.e. 1 year or less) are known as |
| A. | Current assets |
| B. | Fixed assets |
| C. | Intangible assets |
| D. | Investments |
| Answer» B. Fixed assets | |
| 2032. |
|
| A. | Machinery account |
| B. | Building account |
| C. | Creditors account |
| D. | Rent expenses account |
| Answer» E. | |
| 2033. |
|
| 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 | |
| 2034. |
Net loss occurs when |
| A. | Expenses are greater than income |
| B. | Expenses are less than income |
| C. | Expenses = Income |
| D. | Liabilities are greater than income |
| Answer» B. Expenses are less than income | |
| 2035. |
______ 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 | |
| 2036. |
|
| A. | Cash and cash equivalent |
| B. | Creditors |
| C. | Notes payable |
| D. | Bank loan |
| Answer» B. Creditors | |
| 2037. |
|
| A. | Cash from the business |
| B. | Liability of a business |
| C. | Owners claim on total assets |
| D. | Owners claim on total liabilities |
| Answer» D. Owners claim on total liabilities | |
| 2038. |
|
| A. | Cash |
| B. | Equipment |
| C. | Debtors |
| D. | Creditors |
| Answer» E. | |
| 2039. |
|
| A. | Capital + Liabilities = assets |
| B. | Assets + Liabilities = Capital |
| C. | Capital + Assets = Liabilities |
| D. | Liabilities - Capital = Assets |
| Answer» B. Assets + Liabilities = Capital | |
| 2040. |
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. | |
| 2041. |
An asset must be ________ by the business to be shown as an asset in its balance sheet. |
| A. | Possessed |
| B. | Owned |
| C. | Controlled |
| D. | Used |
| Answer» D. Used | |
| 2042. |
_______ is the gross inflow of economic benefits |
| A. | Assets |
| B. | Liabilities |
| C. | Income |
| D. | Expenses |
| Answer» D. Expenses | |
| 2043. |
|
| A. | Resources |
| B. | Obligations |
| C. | Future benefits |
| D. | Expenses |
| Answer» C. Future benefits | |
| 2044. |
An asset possesses which of the following? |
| A. | Future economic benefits for the business |
| B. | All kinds of benefits for the business |
| C. | Expenses for the business |
| D. | Merits & Demerits for the business |
| Answer» B. All kinds of benefits for the business | |
| 2045. |
|
| A. | Partnership |
| B. | Sole Proprietorship |
| C. | Company |
| D. | Non-profit organization |
| Answer» D. Non-profit organization | |
| 2046. |
|
| A. | Identifying an economic event or transaction |
| B. | Preparing Journal |
| C. | Posting entries to Ledger accounts |
| D. | Making decisions about business |
| Answer» B. Preparing Journal | |
| 2047. |
Which of the following is the internal user of financial statements? |
| A. | Creditor of the business |
| B. | Government agency |
| C. | Shareholder of the business |
| D. | Manager of the business |
| Answer» E. | |
| 2048. |
|
| 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 | |
| 2049. |
Auditing refers to |
| A. | Reporting the financial information |
| B. | Examination of financial information |
| C. | Preparation of financial statements |
| D. | Maintaining the ledger accounts |
| Answer» C. Preparation of financial statements | |
| 2050. |
|
| A. | Analysing |
| B. | Preparing financial statements |
| C. | Recording financial information |
| D. | Auditing the books of accounts |
| Answer» D. Auditing the books of accounts | |