Accounts MCQ
Accounts MCQ
Accounts MCQ
a) Shareholders
b) Creditors
c) Managers
d) Regulatory agencies
a) Creditor
b) Department manager
c) Controller
d) Treasurer
a) Service entities
b) Manufacturing entities
c) Non profit entities
d) All of these
5. The work of factory employees that can be physically associated with converting raw
material into finished goods is classified as-
a) Manufacturing overhead
b) Indirect materials
c) Indirect labour
d) Direct labour
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c) Management
d) All
8. Which type of asset class includes those assets which have only definite use and become
valueless when the yield is over?
a) Fixed asset
b) Current asset
c) Fictitious asset
d) Wasting asset
9. An accounting that deals with the accounting and reporting of information to management
regarding the detail information is
a) Financial accounting
b) Management accounting
c) Cost accounting
d) Real Accounting
a) Debtors account
b) Bad debts account
c) Sales account
d) Creditors account
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a) Nominal account- debit all expenses & losses
b) Real account- credit what comes in
13. Cost of goods sold= opening stock+ net purchases+ expenses on Purchases – sales
Which part of formula is wrong? a) opening stock
b) net purchases
c) expenses on Purchases
d)sales
a) Cash account
b) Mahesh Account
c) Sales account
d) Purchase account
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b) Customer’s account
c) Sales account
d) Cash account
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b) Large business enterprise only
c) Small business concerns only
d) Manufacturing and service concern
26. is a person or item for which cost may be ascertained. a) Cost unit
b) Cost centre
c) Cost object
d) Cost estimation
29. Amortization of intangible Asset Such as Goodwill which has indefinite life is an example of
accounting concept
a) Conservatism Concept
b) Continuity Concept
c) Realisation Concept
d) Measurement Concept
31. cost will still be incurred although a plant is shut down temporarily.
a) Cost of raw material
b) Advertising
c) Depreciation
d) Carriage
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32. Accounting principles are generally based upon:
a) Practicability
b) Subjectivity
c) Convenience in recording
d) None of the above
34. The practice of appending notes regarding contingent liabilities in accounting statements is in
pursuance to:
a) Convention of consistency
b) Money measurement concept
c) Convention of conservatism
d) Convention of disclosure
39. Income tax paid by a sole proprietor on his business income should be:
a) Debited to trading account
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b) Debited to profit and loss account
c) Deducted from capital account in the balance sheet
d) None of the above
40. All direct & indirect expenses related to business are charged:
a) Profit and loss account
b) Trading account
c) Trading account Profit and Loss account
d) Directly to Balance sheet
41. According to schedule VI Companies Act which item is not shown on Asset side of Balance
sheet
a) Investment
b) Current Loan & Advances
c) Provision
d) Lease Holds
43. Investment of X company profit in shares of other company PQR Pvt. ltd are recorded
in……………….
a) Asset side of Balance Sheet
b) Liability side of Balance Sheet
c) Profit & Loss a/c
d) Not recorded in Balance Sheet
a) Remains fixed
b) Fluctuates with volume of production
c) Varies in consideration with the volume of sales
d) None of the above
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46. The books to be compulsorily maintained by a company are:
a) Increases assets
b) Results in no change in the total assets
c) Decreases assets
d) Increases liability
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d) Debiting employee a/c ; crediting salary a/c
53. Cost of asset should always be equal to the cost of the liabilities. This concept is
a) Realization Concept
b) Matching Concept
c) Cost Concept
d) Both a and b above
a) Consistency concept
b) Conservatism concept
c) Accounting period concept
d) Cost Concept
a) Current assets
b) Current liabilities
c) Fixed asset
d) Fixed liability
59. Reserve for doubtful debts appearing in the trial balance should be:
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b) Shown as liability side in balance sheet
c) Reduced from related asset in the balance sheet
d) Both a and b
e) Both a and c
a) Debtors
b) Investors
c) Creditors
d) Shareholders
61. According to which concept business is treated as a unit apart from owner
a) Dual concept
b) Divider concept
c) Entity concept
d) Landlord concept
63. True & fair profit and loss a/c of a company know by
a) Preparing trial balance
b) Preparing respective ledger of account
c) Preparing trading a/c
d) Preparing trading & profit & loss a/c
65. Under which concept it is assumed that the enterprises has neither the intention nor the
necessity of liquidation or of curtailing materiality the scale of operation
a) Revenue realization concept
b) Matching cost concept
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c) Going concern concept
d) None of these
66. Making the provision for doubtful debts and discount on debtors in anticipation of actual
bad debts and discount is an example for which concept
a) Conservatism concept
b) Continuity concept
c) Realization concept
d) All of these
72. . Which of the following account balance will be shown on debit side of Trial Balance?
a) Outstanding expenses
b) Cash a/c
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c) Short term loan
d) creditors
73. The reduction in the value of the fixed assets which can arise due to time factor is
a)Discount
b) Depreciation
c)Reduction
d) None of the above
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b) Cost concept
c) Continuity concept
d) Money measurement concept
81. Proposed dividends" is shown in the Balance Sheet of a company under the head:
a) Provisions
b) Reserves and Surplus
c) Current Liabilities
d) Other Liabilities
82. Fixed assets and current assets are categorized as per concept of:
a) Separate entity
b) Going concern
c) Consistency
d) Time period
a) Income Statement
b) Cash Flow Statement
c) Balance Sheet
d) Fund Flow Statement
Bought office wooden table for cash office wooden table cash
Ramesh sold goods on credited to Ram sales cash
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Introduce capital by cheque capital Bank
Paid to creditor Sita by cheque Sita Bank
a) (ii) (iii)(i)
b) (iii)(iv)(ii)
c) (i)(iii)(iv)
d) (i)(iv)
88. Fixed assets and current assets are categorized as per concept of:
a) Separate entity
b) Going concern
c) Consistency
d) Time period
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92. The concept of separate entity is applicable to which of following types of businesses? a.
Sole proprietorship
b. Corporation
c. Partnership
d. All of them
93. Which of the following is time span 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
97. Which of the following is not regarded as the fundamental accounting concept?
a. The going concern concept
b. The separate entity concept
c. The prudence (conservatism) concept
d. Correction concept
98. Using "lower of cost and net realisable value(Market Value)" for the purpose of inventory
valuation is the implementation of which of the following concepts?
a) The going concern concept
b) The separate entity concept
c) The prudence concept
d) Matching concept
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99. The concept of separate entity is applicable to which of following types of businesses?
a) Sole proprietorship
b) Corporation
c) Partnership
d) All of them
100. The revenue recognition principal 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
101. The allocation of owner's private expenses to his/her business violates which of the
following?
a) Accrual concept
b) Matching concept
c) Separate business entity concept
d) Consistency concept
102. The going concern concept assumes that
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c) Immaterial
d) Material
106. "Financial information should be neutral and bias free" is the dictation of which one of the
following?
a) Completeness concept
b) Faithful representation Concept
c) Objectivity Concept
d) Duality Concept
107. Accounting principles are divided into two types. These are ---
a) Accounting Concepts
b) Accounting Conventions
c) Accounting Standards
d) Accounting Concepts &Accounting Conventions
108. Which of the following is not related with Money Measurement Concept ?
a) All business transaction should be expressed only in money
b) The transactions which cannot be expressed in money, will not be recorded in
accounting books
c) Business is treated as separate from the proprietor
d) None of These
109. Which of the following equation is related with Dual Aspect Concept ?
a) Total Assets = Total Liabilities
b) Total Assets = Capital + Outsider’s Liabilities
c) Capital = Total Assets - Outsider’s Liabilities
d) All of the above
110. If the total assets of the company amount to Rs 1,50,000 and owner’s equity is Rs 70,000,the
amount of liabilities will be –
a) Rs 70,000
b) Rs 80,000
c) Rs 90,000
d) Rs 1,00,000
a) Profit
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b) Assets
c) Company
d) Books of A/c
a) Depreciation
b) Wages
c) Salary
d) Stationary
a) Patents
b) Trade Marks
c) Copyright
d) Land
117. The prime function of accounting is to
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c) Controlling function
d) None of these
a) Practicability
b) Subjectivity
c) Convenience in recording
d) None of these
122. The system of recording transaction based on dual aspect concept is called
125. The convention of conservatism when applied to the balance sheet result in.
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c) Providing depreciation
d) None of these
127. The amount brought in by the proprietor in the business should be credited to
a) Cash a/c
b) Capital a/c
c) Drawing a/c
d) Bank a/c
128. The amount of salary paid to Suresh should be debited to
a) Customer a/c
b) Sales return a/c
c) Goods a/c
d) Purchase return a/c
130. sales made by Mahesh for cash should be debited to
a) Cash a/c
b) Mahesh a/c
c) Sales a/c
d) Sales return a/c
131. The rent paid to land lord to be credited to
a) Discount a/c
b) Customer a/c
c) Sales a/c
d) None of these
133. In case of a debt becoming bad, the amount should be credited to
a) Debtors Accounts
b) Bad debts a/c
c) Sales a/c
134. The primary objective of cost accounting is
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a) Ascertain the cost of goods and services
b) Ascertain the profit
c) Presentation of all data
d) None of these
a) Convention of conservatism
b) Convention of full disclosure
c) Convention of consistency
d) None of these
136. Accountant should follow the same principles of accounting continuously is as per which
accounting convention
a) Convention of conservatism
b) Convention of full disclosure
c) Convention of consistency
d) None of these
138. The convention of disclosure implies that all material information should be
a) Single aspect
b) Dual aspect
c) Triple aspect
d) None of these
140. Custom and traditions which guide the accountant while preparing the accounting
statements
a) Accounting convention
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b) Accounting concepts
c) Accounting principles
d) None of these
141. Rules of action or conduct adopted by the accountants universally while recording
accounting transaction
a) Accounting convention
b) Accounting concepts
c) Accounting principles
d) None of these
142. Basic assumptions or conditions upon which the science of accounting is based.
a) Accounting convention
b) Accounting concepts
c) Accounting principles
d) None of these.
A. system in which accounting entries are made on the basis of amounts having become due
for payment or receipt is called
a) Cash concept
b) Accrual concept
c) Matching concept
d) On-going concept
144. Debit the receiver credit the giver rule for
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
145. Debit what come in Credit what goes out rule for
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
146. Debit all expenses and losses Credit all gains and income.
a) Real a/c
b) Personal a/c
c) Nominal a/c
d) None of these
147. A book containing a chronological record of business transaction & original record
a) Journal
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b) Ledger
c) Trial balance
d) None of these
148. Transferring the debit and credit item from the journal to the respective accounts is
150. The transferring of debit and credit items from journal to the respective accounts in the
ledger is called as
a) Ledger
b) Posting
c) Forward journal
d) None of these
151. Which of the following items would not fall under the definition of an asset? a)
Land
b) Machine
c) Cash
d) Owner Equity
152. Which one of the following items would fall under the definition of a liability a)
Cash
b) Debtor
c) Owner’s equity
d) None of these
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154.A business has the following items in it:
Land Rs.1,000,000
Machinery Rs.20,000
Cash Rs.10,000
Debt Rs.0
Owner’s equity ?
a) Rs.200, 000
b) Rs.700, 000
c) Rs.800, 000
d) Rs1, 100,000
157.A business has following items in it
Land ?
Vehicles Rs.600,000
Debtors Rs. 1,20,000
Cash Rs.30,000
Owners’Equity Rs.1,000,000
Loan 5,00,000
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Creditors Rs.50,000
What is the value of the land…………………..
e) 1,000,000
f) 1,550,000
g) 800,000
h) None of these
158. Which of the following equations properly represents a derivation of the fundamental
accounting equation?
a) Only (a)
b) Both (a) (b)
c) All (a)(b)(c)(d)
d) None of these
159. Retained earnings will change over time because of several factors. Which of the following
factors would explain an increase in retained earnings?
a) Net Loss
b) Net income
c) Dividend
d) Investment by share holder.
162. XYZltd.has provided the following information about its balance sheet:
Cash Rs.100
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Accounts Receivable Rs.500
Stock holder equity Rs.700
Accounts Payable Rs.200
Bank Loan Rs.1,000
a) Rs.200
b) Rs.1900
c) Rs.1200
d) Rs.1700
163. The full disclosure principle, as adopted by the accounting profession, is best described by
which of the following?
a) All information related to an entity's business and operating objectives is required to be
disclosed in the financial statements.
b) Information about each account balance appearing in the financial statements is to be
included in the notes to the financial statements.
c) Enough information should be disclosed in the financial statements so a person wishing
to invest in the stock of the company can make a profitable decision.
d) Disclosure of any financial facts significant enough to influence the judgment of an
informed reader
166. The Cash account on the balance sheet should not include which of the following items?
a. Travel advances to employees
b. Currency
c. Money orders
d. Deposits in transit
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b. Assets and equity.
168. The following comments all relate to the recording process. Which of these statements is
correct?
b. The general ledger is posted from transactions recorded in the general journal.
c. The trial balance provides the primary source document for recording transactions into
the general journal.
d. Transposition is the transfer of information from the general journal to the general
ledger.
169. The following comments each relate to the recording of journal entries. Which statement is
true?
c. The chart of accounts reveals the amount to debit and credit to the affected accounts.
171. . Which of the following errors will be disclosed in the preparation of a trial balance?
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d. Recording the wrong amount for a transaction to both the account debited and the
account credited.
172. The basic sequence in the accounting process can best be described as:
173. Inventory accounts should be classified in which section of a balance sheet? a. Current
assets
b. Investments
c. Property, plant, and equipment
d. Intangible assets
Planning
b) Decision making
c) Control
d) All of these
178. Which of the following statements about differences between financial and managerial
accounting is incorrect?
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a) Managerial accounting information is prepared primarily for external parties
such as stockholders and creditors; financial accounting is directed at internal
users.
b) Financial accounting is aggregated; managerial accounting is focused on products and
departments.
c) Managerial accounting pertains to both past and future items; financial accounting
focuses primarily on past transactions and events.
d) Financial accounting is based on generally accepted accounting practices; managerial
accounting faces no similar constraining factors.
180. Manufacturing costs are also known as product costs. Which of the following best describes
those costs which are considered to be manufacturing costs?
181. A company's telephone bill consisting of a Rs.200 monthly base amount, plus long distance
charges, would be classified as a:
a. Variable cost
b. Committed fixed cost
c. Direct cost
d. Semi variable cost
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184. Business entity concept distinguishes between:
a) Asset
b) Liability
c) Accounts
187. Financial statements are:
a) Estimates of facets
b) Anticipated facts
c) recorded facts
188. Retained earnings statement depicts:
a) Appropriation of profits
b) Estimates of profits
c) Estimates of costs
189. User of financial statement is:
a) Management
b) Creditors
c) Bankers
d) All of the above
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a) Sundry creditors
b) Acceptances
c) Unclaimed dividend
d) Short term investment
191. Financial accounting deals with:
a) Determination of cost
b) Determination of profit
c) Determination of price
d) Determination of selling price
192. Financial account record only
a) Actual figures
b) Budgeted figures
c) Standard figures
d) Management Figure
a) 1910
b) 1939
c) 1950
d) 1960
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c) Current asset
d) Owners equity
a) Financial
b) Economic
c) Non financial
d) None of these
199. Which items does not come under the balance sheet
a) sales
b) Share capital
c) Reserves and surplus
d) Unsecured loan
200. The word accounting can be classified in to:
b) Wheldon
c) LucoPacioli
d) R. N. Carter
b) Clerical
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c) Executive
d) Non- executive
204. Depreciation is a . a)
Cash operating expenditure
b) Accrual basis
c) Mercantile basis
206. Which of the following is true for: -“In accounts recording is done of ______ ” a)
only financial transaction
b) Revenue
c) Direct
d) Non- cash
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a) Nominal account
b) Real Account
b) Trial Balance
c) Ledger
d) Journal
b) Salaries account
c) Cash account
d) Outstanding expenses
212. All costs other than direct materials cost, direct labour cost and direct expenses are known as:
a) Indirect material cost
b) Overhead
c) Indirect labour cost
d) Indirect expenses
213. A company's telephone bill consisting of a Rs.200 monthly base amount, plus long distance
charges, would be classified as a:
e. Variable cost
f. Committed fixed cost
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g. Direct cost
h. Semi variable cost
215. The work of factory employees that can be physically associated with converting raw
material into finished goods is classified as-
e. Manufacturing overhead
f. Indirect materials
g. Indirect labour
h. Direct labour
216. Which one of the following would not be classified as manufacturing overhead? a) Indirect
labour
b) Direct materials
c) Insurance on factory building
d) Indirect materials
218. A manufacturing process requires small amounts of glue. The glue used in the process is
classified as
a) A prime cost
b) An indirect material
c) A direct material
d) Miscellaneous expense
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220. Because of automation, which component of product cost is declining? a)
Direct labour
b) Direct materials
c) Manufacturing overhead
d) Advertising
224. Aggregate of cost of goods sold and selling and distribution overheads is known as : a)
Total Cost
b) Office Cost
c) Cost of sales
d) Selling overhead
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Direct material purchased: Rs. 1,00,000
Direct material consumed: Rs. 90,000
Direct labour: Rs. 60,000
Direct expenses: Rs. 20,000
Manufacturing overheads: Rs. 30,000
(a) Rs. 1,80,000
(b) Rs. 2,00,000
(c) Rs. 1,70,000
(d) Rs. 2,10,000
228.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 them
229.Which one of the following items would fall under the definition of liability?
A. Cash
B. Debtor
C. Owner’s equity
D. None of these
230.The basic sequence in the accounting process can best be described as:
A. cash account
B. capital account
C. drawings account
D. creditors account
A. Loan
B. Unsecured Loan
C. Secured Loan
D. Advance by Manager & director
A. Firm
B. Company
C. Individual
D. Society
A. 2:2
B. 2:1
C. Both (1) and (2)
D. None of the above
240. Which group of ratios measures a firm’s ability to meet short-term obligations?
A. Liquidity ratios
B. Debt ratios
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C. Debt ratios
D. Profitability ratios
A. Current asset
B. Fixed asset
C. Equity
D. Mix of finance
A. Financing Activities
B. Operating Activities
C. Investing Activities
D. All of the Above
244. The companies that produce many different products or services usually use:
A. Process costing
B. Job order costing
C. Both process costing and job order costing
D. None of the above
245. The difference between actual sales and break even sales is:
A. Contribution
B. Profit volume rate
C. Margin of safety
D. Gross margin
A. Functional Budget
B. Master Budget
C. Long Period Budget
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D. Flexible Budget
247. A budget which is prepared in a manner so as to give the budgeted cost for any level of
activity is known as:
A. Master budget
B. Zero base budget
C.Functional budget
D.Flexible budget
248. When the sales increase from Rs. 40,000 to Rs. 60,000 and profit increases by Rs. 5,000, the
P/V ratio is —
A. 20%
B. 30%
C. 25%
D.40%
A. Previous
B. Existing
C.Future
D.None of these
252. Costing system, which classify cost into cost categories in a way when an expense is incurred
in process is called
253.In _______ targets are predetermined and actual performances is compared with targets.
A.Budgetary control
B.Both Budgetary control and standard costing
C.Standard costing
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D.Marginal costing
A. Flexibility
B.Adaptability
C.Interest of management
D.Both (1) & (2)
256. UNIVAC is
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