Accounting Mcqs – (Management Sciences) MCQs Latest For FPSC, PPSC, NTS, KPPSC, SPSC & Other Tests
“ Accounting Mcqs “. Tab this page to check “Latest Accounting MCQs” for the preparation of competitive mcqs, FPSC mcqs, PPSC mcqs, SPSC mcqs, KPPSC mcqs, AJKPSC mcqs, BPSC mcqs, NTS mcqs, PTS mcqs, OTS mcqs, Atomic Energy mcqs, Pak Army mcqs, Pak Navy mcqs, CTS mcqs, ETEA mcqs and others. The most occurred mcqs of Accounting in past papers. Past papers of Accounting mcqs. Past papers of Accounting MCQs. Accounting Mcqs are the necessary part of any competitive / job related exams. The Accounting mcqs having specific numbers in any written test. It is therefore everyone have to learn / remember the related Accounting mcqs. The Important series of Accounting Mcqs are given below:
Which of the following is the normal balance of a rent expense account?
A. Cash balance
B. Credit balance
D. Debit balance
Revenue and expense accounts are referred as______________?
A. Nominal accounts
B. Cash accounts
C. Real account
D. Banks account
The real accounts are accounts of Assets, liabilities and ___________?
Building account is classified as _________ account?
Office equipments account is classified as _________ account?
___________ helps business to classify transactions according to their nature?
A. Real accounts
B. General journal
C. Ledger accounts
D. Cash accounts
Which of the following is a real account?
A. Office equipment
B. Rent income
C. Rent expenses
D. Insurance expense
Which of the following accounts are closed at the end of an accounting period?
A. Nominal accounts
B. Real accounts
C. Balance sheet accounts
D. None of them
Which of the following is the closing balance of a ledger account?
A. Balance c/d
B. Balance e/d
C. Balance b/d
D. Balance f/c
The Basic accounting equation is___________?
B. Asset=Expense +Income
Find out the value of assets if: Liabilities=$5000 and Capital=$1000
Calculate the amount of cash if: Total assets=$10,000 Total liabilities=$10,000 Total Capital=$5000
Capital increases if _________ increases?
C. Interest on capital
Capital of a business decreases if there is an increase in___________?
D. Fresh capital
If the total liabilities of a business decrease by $5000 what will be the effect on total asset?
(assuming the amount of capital remain same)
A. Increase by $5000
B. Decrease by $5000
C. Remain constant
D. Increase by $10,000
If the business’s owner withdraws cash for his/her personal use what will be the effect on capital?
A. Remain the same
B. Increase in capital
C. Decrease in capital
D. No effect on capital
Net income equal to Revenues minus____________?
D. Capital expenditures
Collection of account receivable will
A. Increase assets and decrease assets
B. Increase assets and increase capital
C. Increase assets and decrease liabilities
D. Increase assets and increase cash
Payment of expenses will ______ the assets
Which of the following is the practical implementation of the accounting equation?
A. Income statement
B. Cash flow statement
C. Statement of changes in equity
D. Statement of financial position
Which of the following accounting equation is correct?
A. Capital+ Liabilities=Assets+Income
B. Cash+Other assets=Capital-Liabilities
Fresh capital introduction will increase____________?
A. Capital and liabilities
B. Assets and equity
C. Liabilities and equity and bank balance
D. Assets and liabilities
Cash received for services rendered will______________?
A. Increase equity and liability
B. Increase cash and liability
C. Increase fixed assets and cash
D. Increase cash and equity
Which of following best describes the increase in equity expands___________?
A. Business operations
B. Inflows of cash
C. cash outflows
D. Appropriation expenses
If Cash=$1000 inventories=$4000 Debtors=$5000 fixed assets=? Capital+Liabilities=$15000 What is the Amount of total assets?
An increase in provision for bad debt will____________?
A. Decrease net income
B. Increase net income
C. Decrease liabilities
D. Increase liabilities
Current assets – Current liabilities=?
A. Absorbed capital
C. Net assets
D. Net working capital
A. Net income
D. Net expenses
The process of recording is done?
A. once a year
B. Two times a year
C. Frequently during the accounting period
D. At the end of a accounting period
General journal is a book of _______ entries?
The process of recording transactions in different journals is called_________?
A. Entry making
Every business transaction affects at least ________ accounts?
Discount allowed is a kind of deduction from_____________?
A. Cash account
B. Account receivable
C. Account payable
D. Discount account
The other name of journal is____________?
A. T account
C. Day book
D. Cash book
A journal entry in which two or more account is debited or credited is referred as____________?
A. Multi entry
B. Journal entry
C. Additional entry
D. Compound entry
he term 2/10-n/30 implies that ______ % discount will be given if the payment is made within days or full amount is receivable within 30 days?
Goods returned by customer should be debited to which of the following accounts?
A. Sales account
B. Sales income account
C. Return inward account
D. Expenses account
Discount allowed is___________?
A. Expense of business
B. Loss of business
C. Income of business
D. Abnormal loss of business
_________ is the evidence that a transaction took place?
A. Source documents
Which of the following will be debited if a business purchases goods on credit?
Which of the following accounts will be debited if the business’s owner withdraws cash from business for his personal use?
Journals are also referred as_____________?
A. T account
B. Book of original entries
C. Book of entries
D. Books of economic event
The standard format of journal does not include which of the following?
A. Assets column
B. Description column
C. Date column
D. Amount column
In which of the following orders data is entered in journal?
A. Numeric order
B. Alphabetical order
C. Bullets order
D. Chronological order
Which of the following accounts will be credited if a company purchases building for cash?
A. Fixed assets account
B. Capital account
C. Building account
D. Cash account
Discount for quick repayment of debt is normally referred as____________?
A. Prompt payment discount
B. Trade discount
C. Cash discount
D. Bulk discount
The first step in accounting process is___________?
A. Posting the transaction
B. Identifying the transaction
C. Recording the transaction
D. Preparing the source documents
A chart of accounts generally start with which of the following types of accounts?
A. Assets accounts
B. Cash accounts
C. liability accounts
D. Revenue accounts
Total depreciation of an asset cannot exceed its:
A. Residual value
B. Scrap value
C. Market value
D. Depreciable value
Amount paid to Masood posted to the credit side of his account would affect___________?
A. Masood’s account
B. Cash account and Gagan’s account
C. Cash account
D. None of these
Which of the following statements is/are true ?
A. The balance of Petty Cash Book is a liability
B. Total of Return Outward Book is debited to Return Outward Account
C. A sale of an asset is recorded in the Sales Book
D. Cash Book is a subsidiary book as well as a ledger
Which of the following is true regarding closing entries?
A. They must be followed by reversing entries
B. They must be made after the reversing entries but before the adjusting entries
C. They transfer the balances in all of the Nominal Accounts to the Trading and Profit and Loss Account
D. They must be made after the adjusting entries but before the reversing entries
Closing stock is generally valued at______________?
A. Market Price
B. Cost Price
C. Cost price or Market price whichever is higher
D. Cost price or Market price whichever is lower
Which of the following assets is/are to be valued at the lower of cost and net realizable value?
D. Both B. and C. above.
Which of the following methods is not a practical way of realizing revenue?
A. Percentage-of-completion method
B. Delivery method
C. Production method
D. Moving average method
The amount payable to a person as consideration for the use of rights vested in him is
C. Purchase consideration
Buildings account is debited with an amount towards repairs. This is an example of?
A. Error of omission
B. Error of principle
C. Error of commission
D. Compensating error
The concept of conservatism will have the effect of______________?
A. Overstatement of Liabilities
B. Understatement of Assets
C. Overstatement of Assets
D. Understatement of Liabilities
During the year 2011-2012, the value of closing inventory was overstated by 25,000. Which of the following is true?
A. The income was overstated during 2011-12 and closing inventory will be overstated during 2012-2013
B. The cost of goods sold was overstated during 2011-2012 and income will be understated during 2012-2013
C. The retained earnings was overstated during 2011-2012 and retained earnings will be understated during 2012-2013
D. The cost of goods sold was understated during 2011-2012 but retained earnings will not be affected during 2012-2013
Which of the following errors is an error of omission?
A. Repairs to buildings have been debited to buildings account
B. Wages paid to Mohan have been debited to his account
C. The total of the sales journal has not been posted to the Sales Account
D. Sale of ` 100 was recorded in the Purchases Journal
Which of the following statements is /are true?
A. Entering wrong amount in the subsidiary book affects the agreement of the Trial Balance
B. Errors of principle do not affect the agreement of Trial Balance
C. Undercasting or overcastting of a subsidiary book is an example or error of commission
D. Both B. and C. above
Which of the following is true?
A. Error of carry forward affects two accounts
B. Omission of a transaction from a subsidiary record affects only one account
C. Error of casting affects personal accounts
D. Error of principle involves an incorrect allocation of expenditure or receipt between capital and revenue
Journal proper is meant for recording_____________?
A. Return of goods
B. Credit purchase of fixed assets
C. All such transactions for which no special journal has been kept by the business
D. None of these
Closing stock in the Trial Balance implies that______________?
A. It is adjusted in the Cost of Sale A/c
B. It is adjusted in the Purchase A/c
C. It is already adjusted in the opening stock
D. It is adjusted in the Profit &Loss A/c
Which of the following statements is true?
A. A customer to whom goods have been sold on credit cannot avail himself of a cash discount
B. A Trial Balance will not tally if a transaction is omitted
C. If a Trial Balance tallies, it always means that none of the transactions has been completely omitted
D. A credit balance in the Pass Book indicates excess of deposits over withdrawals
The adjustment to be made for income received in advance is:
A. Add income received in advance to respective income and show it as asset
B. Deduct income received in advance from respective income and show it as a liability
C. Add income received in advance to respective income and show it as a liability
D. Deduct income received in advance from respective income and show it as an asset in the Balance Sheet
Which of the following statements is correct about Trial Balance?
A. The Trial Balance is prepared after preparing the Profit and Loss Account
B. The Trial Balance shows only nominal account balances
C. The Trial Balance shows only balances of Assets and Liabilities
D. The Trial Balance has no statutory importance from the point of view of law
While finalizing the current year‘s accounts, the company realized that an error was made in the calculation of closing stock of the previous year. In the previous year, closing stock was valued more by 50,000. As a result
A. Previous year‘s profit is understated and current year‘s profit is overstated.
B. Previous year‘s profit is overstated and current year‘s profit is also overstated.
C. Previous year‘s profit is overstated and current year‘s profit is understated.
D. There will be no impact on the profit of either the previous year or the current year.
Which of the following is not correct about Errors?
A. Errors which affect one account can be errors of posting
B. Errors of omission arise when any transaction is left to be recorded
C. Errors of commission arise when any transaction is recorded in a fundamentally incorrect manner
D. Errors of carry forward from one year to another year affect both Personal and Real A/c
If goods worth 1,750 returned to a supplier is wrongly entered in sales return book as 1,570, then
A. Gross Profit will increase by 3,320
B. Net Profit will decrease by 3,140
C. Gross Profit will decrease by 3,500
D. Gross Profit will decrease by 3,320
For the past 3 years, DK Ltd. has failed to accrue unpaid wages earned by workers during the last week of the year. The amounts omitted, which were considered material, were as follows:
March 31,2010 – ` 56,000
March 31, 2011 – ` 51,000
March 31, 2012 – ` 64,000
The entry on March 31, 2012 to rectify these omissions would include a
A. Debit to wage expense for ` 51,000
B. Debit to wage expense for ` 64,000
C. Credit to wage expense for ` 64,000
D. Debit to wage expense for ` 13,000
Purchase journal is kept to record_____________?
A. All credit purchases
B. All credit purchases of goods
C. All purchases of goods
D. None of these
The beginnings inventory of the current year is overstated by 5,000 and closing inventory is overstated by 12,000. These errors will cause the net income for the current year by
A. 12,000 (understated.
B. 17,000 (overstated.
C. 7,000 (overstated.
D. 7,000 (understated.
The accountant of Leo Ltd. recorded a payment by cheque to a creditor for supply of materials as 1,340.56. The bank recorded the cheque at its correct amount of 3,140.56. The Company has not passed any rectification entries and the error is not detected through the bank reconciliation. The impact of this error is
A. The purchases are understated
B. The balance of creditors is understated
C. The Trial Balance will not agree
D. The favorable bank balance as per Pass Book is less than the Bank balance as per Cash book
Which of the following errors affects the agreement of a Trial Balance?
A. Mistake in balancing an account
B. Omitting to record a transaction entirely in the subsidiary books
C. Posting an entry on the correct side but in the wrong account
D. Recording of a wrong entry in the subsidiary books
Which of the following should not be treated as revenue expenditure?
A. Annual fire insurance premiums on Plant and Equipment
B. Interest on loans and debentures
C. Sales tax paid in connection with the purchase of office equipment
D. Small expenditures on long- lived assets, such as ` 20 for a paper weight.
Capital expenditure is an expenditure which
A. Will benefit the next accounting period
B. Benefits the current accounting period
C. Results in the acquisition of a permanent asset
D. Results in the acquisition of a current asset
Which of the following is not a deferred revenue expenditure?
A. Preoperative expenses
B. Expenses in connection with issue of equity shares
C. Heavy advertising expenses to introduce a new product
D. Legal expenses incurred in defending a suit for breach of contract to supply goods
Any donation received for a specific purpose is a_________?
C. Revenue receipts
D. Capital receipts
Which of the following is an item of capital expenditure?
A. Monthly rent of a machinery used in the business
B. Interest on borrowed fund utilized for acquisition of Office Furniture
C. Installation charges paid in conjunction with the purchase of Office Equipment
D. Research and development costs during the year
The balance of which of the following accounts do not disappear, once they are debited/credited to Trading Account?
C. Inward returns
D. Closing stock
Which one of the following should be considered a revenue expenditure?
A. Loss of 10,000 incurred in increasing the sitting accommodation of a hotel
B. 1000 paid for the execution of a new plant
C. Damage paid on account of breach of a contract to supply certain goods
D. Repair to machinery purchased, second hand.
Which of the following statements are / is true? – Events after Balance Sheet are?
A. All the significant events after the Balance Sheet date
B. All changes after Balance Sheet date before its approval
C. The events after Balance Sheet date but before its approval by the board
D. The events after Balance Sheet date but before submitting it to the Registrar of Companies
Which one of the following is a capital expenditure?
A. Compensation paid to Directors on termination of their services
B. Expenditure incurred in connection with the renewal of a Trade Mark.
C. Royalty paid in installments for the purchase of rights to manufacture and sell patient
D. Gratuities paid to Directors on termination of their services.
Which of the following enhances the earning capacity of an asset?
A. Replacing damaged parts of an asset
B. Reduction in operating costs
C. Reduction in operating costs
D. Both A. and C. above
Which of the following items should not be capitalized relating to fixed assets?
A. Interest payable on loans or deferred credits taken for the acquisition or construction of fixed assets before they are ready for use
B. Expenditure incurred on test runs and experimental production
C. Stand by equipment and servicing equipment
D. Administration and general expenses
Which of these errors affect only one account?
A. Errors of posting
B. Errors of carry forward
C. Errors of casting
D. All the three
Which of these errors affect two or more accounts
A. Errors of principle
B. Errors of complete omission
C. Errors of posting to wrong account
D. All the three
Which of the following error is an error of principle
A. 500 paid for wages debited to salary A/c
B. 5,000 incurred on installation of new plant debited to travelling expenses A/c
C. 5,000 received from Sham credited to Ram A/c
D. 500 being purchase of raw material debited to purchase A/c ` 50
Which of the following is an one sided error?
A. 500 purchase of old equipment not recorded in the books of A/c at all
B. 500 being expense on travelling expense credited to travelling expenses
Any gain on the sale of non-current assets should be _________ from the net profit and the loss must be _________to the net profit in determining fund from operation?
A. Added, Added
B. Added, Reduced
C. Deducted, Added
D. Deducted, Deducted
Cash book records?
A. Only revenue receipts
B. All types of cash receipts and payments
C. Only cash sales
D. Only capital receipts
In a three column cash book_______________does not exist?
A. Bank column
B. Cash column
C. Petty cash column
D. Discount column
Which of these transactions will not be recorded in cash book?
A. Cash paid to creditors
B. Cash received from debtors
C. Salary remained outstanding
D. Cash deposited with bank
The closing balance of a petty cash book is a / an___________?
Which column of a cash book will not have credit balance___________?
A. Discount column
B. Bank column
C. Cash column
Petty cash balance is a/an___________?
Which of these is a Part of cash in hand?
A. Postage stamps
B. B/R endorsed
C. Cheque Deposited with Bank