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 a Real A/c?
A. Bank A/c
B. Salary A/c
C. Building A/c
D. Goodwill A/c
Which of the following is a representative Personal A/c?
A. Outstanding Salary A/c
B. SBI A/c
C. Rent A/c
D. Bad debts A/c
Which of the following is a Nominal A/c ?
A. SBI A/c
B. Rent A/c
C. Outstanding Salary A/c
D. Debtors A/c
Goodwill A/c is a/an__________?
A. Tangible Asset
B. Nominal A/c
C. Intangible Asset
D. Fictitious Asset
Posting is the process of____________?
A. Posting suitable person to a suitable job
B. Posting the letters in drop box
C. Entering in the ledger the information contained in the ledger
D. All the three
A book wherein various accounts are opened is called____________?
A. Journal
B. Subsidiary books
C. Ledger
D. Trial Balance
Which of these is not a special purpose journal?
A. Purchase journal
B. Cash journal
C. Debtors journal
D. Sales journal
The periodic total of sales day book is posted to___________?
A. Sales A/c
B. Sales return A/c
C. Cash sales A/c
D. Credit sales A/c
The periodic total of purchase day book is posted to____________?
A. Cash purchase A/c
B. Purchase A/c
C. Purchase register
D. Credit purchase A/c
Capital expenses are shown in___________?
A. Balance Sheet
B. Trading A/c
C. Profit and Loss A/c
D. None of these
Revenue receipts are shown in___________?
A. Manufacturing A/c
B. Profit and Loss appropriation A/c
C. Balance Sheet
D. Trading and Profit and Loss A/c
Revenue is generally recognized as being earned at that point of time when?
A. sale is effected
B. production is completed
C. cash is received
D. debts are collected
Which of the following is a revenue expenses?
A. Raw material consumed
B. Share Capital
C. Long term loan raised from bank
D. Plant purchased
Which of the following is a capital expenditure?
A. Salary paid to workers
B. Repair of plant and machinery
C. Cost of stand by equipment
D. Annual whitewash of the office building
Which of these types of expenditure would not be treated as a Capital Expenditure?
A. Extension of an Asset
B. Acquisition of an Asset
C. Improvement of the existing Asset
D. Maintenance of the Asset
Expenses of the following nature are treated as a Revenue expenses except__________?
A. Expenses for day to day running of the business
B. Putting the new asset in working condition
C. Purchase of raw material
D. Depreciation
Cash received from debtors would be deemed as___________of funds.
A. No flow
B. Uses
C. Sources
D. Gain
Generally the term fund is used to mean the difference between?
A. Current assets and current liabilities
B. Current liabilities and non-current liabilities
C. Current assets and non-current liabilities
D. Profit and loss A/C and Balance sheet
Which of these documents is not required for Bank Reconciliation?
A. Bank column of Cash Book
B. Bank Statement
C. Bank Pass Book
D. Trial Balance
Which of these items are taken into consideration for preparation of adjusted Cash Book
A. Mistake in Cash Book
B. Cheques deposited but not cleared
C. Cheque issued but not presented for payment
D. Mistake in Pass Book
Credit balance as per Cash Book mean____________?
A. Terms deposits with bank
B. Bank overdraft
C. Surplus cash
D. None of these
Debit side of Bank Pass book corresponds to___________?
A. Credit side of Cash Book
B. Debit side of Trial Balance
C. Debit side of Cash Book
D. Credit side of Balance Sheet
Accounting Mcqs
Difference in Bank Balance as per Pass Book and Cash Book may arise on account of_____________?
A. Cheque issued but dishonoured
B. Cheque issued but not presented
C. Cheque deposited and credited by bank
D. Both A. and B.
The Bank Reconciliation Statement is prepared?
A. To arrive at the Bank Balance
B. To rectify the mistakes in the Cash Book
C. To arrive at the Cash Balance
D. To bring out the reasons for the difference between the Balance as per Cash Book and the Balance as per Bank Statement
Bank reconciliation is a statement prepared to reconcile__________?
A. Cash book
B. Trial balance
C. Bank A/c
D. Cash as per cash book with bank balance as per bank pass book
Bank reconciliation statement is a part of_________?
A. Cash book
B. Auditors report
C. Trial balance
D. None of these
Benefits of preparing Bank Reconciliation Statement includes___________?
A. Help know actual bank balance
B. Highlights under delay in clearance of cheques deposited but not credited
C. It bring out any errors committed in preparation of Cash book / Bank Pass Book
D. All the three
Debit balance as per bank pass book mean_____________?
A. Terms deposits with bank
B. Bank Overdraft
C. Surplus cash
D. None of these
Which of the following is not a cause of difference in balance as per cash book and balance as per bank pass book___________?
A. Errors in pass book
B. Errors in cash book
C. Cheques deposited and cleared
D. Cheques issued but not presented for payment
Provision is created for____________?
A. Creation of Secret Reserves
B. Known Liabilities
C. Unknown Liabilities
D. All the Three
Which of the following is not a method of charging depreciation?
A. Written down value Method
B. Straight line Method
C. Discounted present value Method
D. Sum of digits Method
A second hand car is purchased for 2,00,000 and sold at 1,40,000 after two years. If depreciation is charged @ 10% on SLM method, find the profit or loss on sale of the car?
A. 20,000 Loss
B. 10,000 Loss
C. 20,000 Profit
D. 10,000 Profit
A second hand car is purchased for 2,00,000 and sold at 1,40,000 after two years. If depreciation is charged @ 10% on written down value method, find the profit or loss on sale of the Second hand car?
A. Loss of 11,000
B. Loss of 22,000
C. Loss of 20,000
D. Profit of 11,000
Which of the following is true with respect to providing depreciation under diminishing balance method?
A. The amount of depreciation and the rate of depreciation decrease every year
B. The amount of depreciation keeps increasing every year while the rate of depreciation keeps decreasing
C. The amount of depreciation decreases while the rate of depreciation remains the same
D. The amount of depreciation and the rate of depreciation increases every year
Which of the following statements best describes the purpose of depreciation?
A. A process of correlating the market value of an asset with its gradual decline in physical efficiency
B. Regular reduction of asset value to correspond to changes in market value as the asset ages
C. Allocation of cost in a manner that will ensure that Plant and Equipment items are not carried on the Balance Sheet in excess of net realizable value
D. Allocation of the cost of an asset to the periods in which services are received from the asset
The main objective of providing depreciation is to?
A. Provide funds for replacement of fixed assets
B. Show the true financial position in the Balance Sheet
C. Calculate the true profit
D. Both A. and B. above
Depreciation is a process of____________?
A. Valuation and allocation
B. Valuation
C. Allocation
D. Appropriation
The portion of the acquisition cost of the asset yet to be allocated is known as___________?
A. Written down value
B. Salvage value
C. Accumulated value
D. Residual Value
Which of the following statements is true with regard to written down value method of depreciation?
i. The rate at which the asset is written off reduces year after year
ii. The amount of depreciation provided reduces from year to year
iii. The rate of depreciation as well as the amount of depreciation reduce year after year
iv. The value of the asset gets reduced to zero over a period of time
A. Both (i) and (ii) above
B. Only (ii) above
C. Only (i) above
D. (i),(ii) and (iii) above
The accounting process of gradually converting the unexpired cost of fixed assets into expenses over a series of accounting periods is_________?
A. Depreciation
B. Decrease in market value of the asset
C. Physical deterioration of the asset
D. Valuation of an asset at a point of time
Which of the following factors are primarily considered to determine the economic life of an asset?
A. Passage of time, asset usage, and obsolescence
B. Tax regulations and asset usage
C. Tax regulations and SEBI guidelines
D. SEBI guidelines and Asset usage
In which of the following methods, the cost of the asset is spread over in equal proportion during its useful economic life?
A. Straight-line method
B. Units-of-production method
C. Written down value method
D. Sum-of-the years‘-digits method
Which of the following statements is correct about Depreciation?
A. Depreciation cannot be provided in case of loss in a financial year
B. Depreciation is a charge against profit
C. Depreciation is an appropriation of profit
D. Depreciation is provided in the books only when there is profit
Depreciation is calculated on the____________?
A. Market price
B. Cost price of asset
C. Cost+ Transport+ Installation expenses
D. Cost or market values whichever is less
Which of the following is an external cause of depreciation?
A. Misuse
B. Routine repair and maintenance
C. Obsolescence
D. Wear and tear
Which of the following is not depreciated?
A. Plant and Machinery
B. Land
C. Building
D. Office equipment
____________is also known as Appraisal system of depreciation?
A. Inventory system
B. Annuity system
C. Survey system
D. Insurance
Bad debts recovered account will be transferred to______________?
A. Profit and Loss Account
B. Debtor‘s Account
C. Provision for Doubtful Debt Account
D. Either (b )or C. above
The entry for creating a Provision for bad debts is_____________?
A. Debit Debtors A/c and credit Provision for Bad Debts A/c
B. Debit Provision for Bad Debts A/c and credit Debtors A/c
C. Debit Provision for Bad Debts A/c and credit Profit & Loss A/c
D. Debit Profit and Loss A/c and credit Provision for Bad Debts A/c.
When a person purchasing goods on credit he becomes a_________in the books of the seller?
A. Debtor
B. Defaulter
C. Creditor
D. Offender
Cost of goods sold excludes___________?
A. Carriage inward
B. Opening Stock
C. Wages & Salary
D. Postage & Stamps
Tax deducted at source A/c appears in___________?
A. Assets side
B. Profit & Loss A/c
C. Liability side
D. Debited to Capital A/c
Investment in own share A/c appears in____________?
A. Asset side
B. Netted from Capital
C. Liability side
D. Profit & Loss A/c
Payments received in advance from a customer for a contract can be__________?
A. Shown as a deduction from contract work-in-progress on asset side
B. Credited to P&L A/c
C. Shown as a liability
D. Either A. or B. above
If a company has contingent liabilities, they appear in the__________?
A. Directors‘ report
B. Balance Sheet
C. Notes on account to Balance Sheet
D. Chairman‘s report
Recent developments have made much of a company‘s inventory obsolete. This obsolete inventory should be?
A. Written down to zero or its scrap value
B. Carried in the accounting records at cost until it is sold
C. Shown in the Balance Sheet at cost, but classified as a non-current asset
D. Shown in the Balance Sheet at its replacement cost
Which of the following is not classified as inventory in the financial statements?
A. Work-in-process
B. Finished goods
C. Stores and spares
D. Advance payments made to suppliers for raw materials
If actual bad debts are more than the provision for bad debts, then there will be a_____________?
A. Debit balance of Bad Debts Account
B. Debit balance of Provision for Bad Debts Account
C. Credit balance of Provision for Bad Debts Account
D. Debit balance of Discount on Debtors Account
The creation of provision for doubtful debts given as an adjustment requires____________?
A. Debit Profit and Loss Account and deduct the provision from debtors
B. Credit Profit & Loss Account and deduct the provision from debtors
C. Debit Profit & Loss Account and add the provision to debtors
D. Credit Profit and Loss Account and add the provision to debtors
Under the direct write-off method of recognizing a bad debt expense. Which of the following statements is/are true?
A. The bad debt expense is not matched with the related sales
B. It violates the matching principle of accounting
C. Revenue is overstated in the year of sales
D. All of the above
At the time of preparation of financial accounts, bad debt recovered account will be transferred to?
A. Profit & Loss Adjustment A/c
B. Profit & Loss A/c
C. Debtors A/c
D. Profit & Loss Appropriation A/c
The balance of Revaluation Reserve pertaining to an asset that has been disposed off or retired can be transferred to?
A. Profit & Loss A/c
B. General Reserve A/c
C. Asset A/c
D. Capital Reserve A/c
Average Accounting Return is a measure of accounting profit relative to:
A. Book value
B. Cost
C. Intrinsic value
D. Market value
During the accounting period, sales revenue is Rs. 25,000 and accounts receivable increases by Rs. 8,000. What will be the amount of cash received from customers for the period?
A. Rs. 25,000
B. Rs. 33,000
C. Rs. 17,000
D. Rs. 8,000
Which of the following form of business organization is least regulated?
A. Sole-proprietorship
B. Limited Partnership
C. General Partnership
D. Corporation
Which of the following statement is considered as the accountant’s snapshot of firm’s accounting value as of a particular date?
A. Cash Flow Statement
B. Balance Sheet
C. Income Statement
D. Retained Earning Statement
Period cost include which of the following ?
A. Direct labor
B. selling Expense
C. factory overhead
D. selling Expenses & administrative expenses
The compensation paid by the borrower of fund to lender, from the borrower point of the cost of borrowing fund is called?
A. Interest Rate
B. Nominal interest rate
C. Required rate of return
D. All of the above
An income statement in which each item expressed as percentage of Sale?
A. income statement
B. Balance sheet
C. common size income statement
D. All of the Above
Short term Assets expected to be converted into cash within 1 year or less than?
A. Current Assets
B. Current Assets & current liabilities
C. Fixed Assets
D. All of the above
_________is the cost of converting raw material into finished products?
A. Explicit cost
B. Prime cost
C. Job order cost
D. Conversion cost
Net sales equals, sales minus:
A. cost of goods sold
B. Return inwards
C. Return outwords
D. carriage on sales
LIFO stands for__________?
A. Link input, Format Output
B. Lots in , Few out
C. Last input, First Output
D. Last in, First Out
Property, Plant and Equipment are conventionally presented in the Balance Sheet at _________?
A. Historical cost – Salvage Value
B. Replacement cost – Accumulated Depreciation
C. Historical cost – Depreciation portion thereof
D. Original cost adjusted for general price-level changes
Outstanding salaries is shown as___________?
A. An Asset in the Balance Sheet
B. By adjusting it in the P & L A/c
C. A Liability
D. Both B. and C. above
Insurance prepaid is shown as:___________?
A. Current Asset
B. Fixed Asset
C. Current Liability
D. Income
Depreciation appearing in the Trial Balance should be?
A. Debited to P&L A/c
B. Reduced from related asset in Balance Sheet
C. Shown as liability in Balance Sheet
D. Both A. and C. above
A club paid subscription fees of `1,400. Out of which ` 200 is prepaid. In such case
A. P&L A/C is debited with 1,200
B. P&L A/C is debited with 1,400
C. 200 is shown as current asset
D. Both B. and C. above
Bad debts recovered is:
A. Credited to P&L A/c
B. Reduced from debtors in Balance Sheet
C. Debited to P&L A/c
D. Added to debtors in Balance Sheet
The adjustment to be made for prepaid expenses is____________?
A. Add prepaid expenses to respective expenses and show it as an asset
B. Deduct prepaid expenses from respective expenses and show it as an asset
C. Deduct prepaid expenses from respective expenses and show it as a liability
D. Add prepaid expenses to respective expenses and show it as a liability
On scrutiny of a firm‘s books of accounts, it was observed that the following errors have occurred in the previous years but have not yet been rectified.
i. Depreciation for 2011-2012- 7,000 understated
ii. Accrued expenses as at March 31, 2013 – 10,000 understated
The impact of this on the reported net income for the year ending March 31, 2013 is
A. 17,000 Understated
B. 10,000 Overstated
C. 7,000 Overstated
D. 17,000 Overstated
Which of the following entries is correct in respect of reserve for discounts on accounts payable?
A. Debit P&L A/c and Credit Reserve for Discount on Accounts Payable A/c
B. Debit Reserve for Discount on Accounts Payable A/c and credit Accounts Payable A/c
C. Debit Reserve for Discount on Accounts Payable A/c and Credit P&L A/c
D. Debit Accounts Payable A/c and Credit P&L A/c
Sundry debtors as per Trial Balance is 43,000 which includes 2,200 due from ‗H in respect of goods sent to him on approval basis, the cost price of which is 1,800. Rectification would involve:
A. Deducting 1,800 from closing stock and deducting 2,200 each from debtors and sales
B. Adding 2,200 to closing stock
C. Adding 1,800 to closing stock and deducting 2,200 each from debtors and sales
D. Deducting 1,800 from debtors
Goods in stock worth 800 are destroyed by fire and the Insurance Co. is accepted the claim for 600. Adjustment would involve
A. Debit of 800 to Trading Account and credit of 600 and 200 to insurance company and Profit and Loss Account respectively
B. Credit insurance company for 600
C. Deduct the 800 from closing stock in the Trading Account
D. Debit of 600 and 200 to insurance company and Profit and Loss Account respectively and credit of 800 to Trading Account
Prepaid expenses are valued on the Balance Sheet at
A. Current cost
B. Replacement cost
C. Cost to acquire less accumulated amortization
D. Cost less expired portion
Which of the following relationships is/are false?
A. Net Profit = Gross Profit – Administration and Other expenses
B. Opening Stock + Purchases – Closing Stock = Cost of Sales
C. Net Profit = Gross Profit + Administration expenses and Other expenses
D. Both B. and C. above
Gross Profit is equal to_________?
A. Sales – Cost of goods sold
B. Opening Stock + Purchases – Closing Stock
C. Sales – Closing Stock + Purchases
D. None of the above
Which of the following shall not be deducted from net profit while calculating managerial remuneration?
A. Debts considered bad and written off
B. Loss on sale of undertaking
C. Liability arising from a breach of contract
D. Director‘s remuneration
Which of the following equations is correct?
A. Gross Profit+ Sales+ Direct expenses+ Purchases- Closing stock = Opening Stock
B. Gross Profit+ Sales+ Direct expenses+ Purchases+ Closing stock = Opening stock
C. Gross Profit + Opening Stock + Direct expenses + Purchases- Closing stock = Sales
D. Gross Profit – Opening Stock + Direct expenses + Purchases +Closing stock = Sales
Which of the following is not true with regard to preparation of Profit & Loss Account?
A. Profit & Loss Account is prepared for a certain period and hence it is an interim statement
B. Profit & Loss Account does not disclose the effect of non-financial items
C. Net Profits as disclosed by P&L Account is not absolute
D. Net Profits are ascertained on the basis of current costs
The Profit and Loss Account shows the:
A. Financial results of the concern for a period
B. Cost of goods sold during the period
C. Financial results of the concern on a particular date
D. Financial position of the concern on a particular date
Which of the following will not appear in Profit and Loss Account of a business?
A. Drawings
B. Accrued expenses
C. Bad debts
D. Reserve for discount on Sundry Creditors
Which of the following is not a financial statement?
A. Balance Sheet
B. Profit and Loss Account
C. Funds Flow Statement
D. Trial Balance
If unexpired insurance appears in the Trial Balance, it should be:
A. Debited to the Profit & Loss Account
B. Credited to the Profit & Loss Account
C. Shown on the liabilities side of the Balance Sheet
D. Shown on the assets side of the Balance Sheet
Which of the following are/is not a fixed asset?
A. Fixed deposit in bank
B. Vehicle
C. Stock
D. Both A. and C. above
Which of the following are/is a current asset?
A. Stock
B. Sundry Debtors
C. Prepaid insurance
D. All of A. B. and C. above
Tax deducted at source appears in the Balance Sheet
A. On the assets side under loans and advances
B. On the assets side under current assets
C. On the liabilities side under current liabilities
D. On the liabilities side under provisions
Which of the following statements is false ? select the false from below options
A. A person who owes to the business is called Debtor
B. Balance Sheet discloses financial position of the business
C. Decrease in the value of the asset could decrease the value of a liability
D. Assets are to be shown in the Balance Sheet at the realizable value
The Balance Sheet gives information regarding the____________?
A. Financial position during a particular period
B. Results of operations for a particular period
C. Profit earning capacity for a particular period
D. Financial position as on a particular date
Which of the following accounts appear(s) in the Balance Sheet of a business?
i. Stock at the end of the financial year
ii. Stock at the beginning of the financial year
iii. Drawings
iv. Prepaid Rent
v. Interest received but not yet earned
A. Only (iii) above
B. Only (i) above
C. Both (i)and (iii) above
D. (i), (iii), (iv) and (v) above